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Margin

How to calculate margin on a lot: from bid to sale price

The cost structure, the difference between margin and markup, and the thresholds at which to walk away from a lot.

· ImportOS

Margin on a lot is easy to get wrong: forget one line, or confuse margin with markup. Here is how to do it consistently.

What the cost is made of

  1. The bid on the lot.
  2. Auction fees: buyer fee, online bid fee, flat fees.
  3. US inland transport to the port, ocean freight, port charges.
  4. Delivery from the EU port to customs (for Ukraine, to the border).
  5. Duty, excise, VAT and other state charges of the destination country.
  6. Services: customs broker, certification, registration support.
  7. Repair: a range, not a single number, because it depends on the damage.
  8. Insurance.
  9. Your fee.

The ImportOS calculator shows all these lines separately, each with an explanation and a formula, so a mistake in one line is visible at once.

Margin versus markup

  • Margin = (sale price − cost) / sale price.
  • Markup = (sale price − cost) / cost.

Example: cost $14,807, sale price $16,500. Profit $1,693. Margin is 10.3% and markup is 11.4%. These are different numbers, and mixing them up is the most common reason for "supposedly 15%, really 13%". ImportOS shows margin on the sale price and markup separately.

Decision thresholds

By default the calculator uses these thresholds: 15% and up is a good margin, 8% and up is acceptable, 0% and up is risky, below that is not worth it. These are typical values, so set your own. If confidence in the calculation is low (for example typical tariffs or unverified customs rates were used), a "good" rating is automatically lowered to "acceptable".

What makes margin unreliable

  • Repair. The cost range can be wide. Look at the margin in the worst case, not only the average.
  • Sale price. An estimate from similar listings depends on the sample size. A small sample gives low confidence.
  • Exchange rates. Customs payments are calculated at the rate on the declaration date.
  • Typical tariffs. Until you enter your own, the calculation warns you.

A practical rule

Calculate margin for three scenarios: optimistic, average and pessimistic (the lower and upper bounds of the sale price, repair at the edge of the range). If the deal survives the pessimistic one, the bid is safe.