The Life Starter
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Course Library · Lesson 2 of 6
Money · Guided lesson

Calculate the true item contribution

About 30 minutes · 8 reading + 22 practice and checks
Time includes reading, practice, and questions. Extra videos or further study are optional.
See this course’s project requirements

A fictional resale feasibility file with an item screen, cost model, comparable sales, listing brief, return scenario and go-or-no-go decision.

Keep your working files in your own notebook or software. Save a private description, checklist, and work link in My Proof.

What to include

  • A resale-item screen with exclusions and verification needs.
  • An item cost sheet including fees, shipping and time. A comparable-sale note with a justified test price.
  • An unpublished condition listing and package-measurement brief.
  • A return scenario showing contribution, loss and cash tied up.
  • A resale feasibility decision supported by the full cost and return model.

Review and revise

Use these criteria to check your work and choose what to improve.

  • Calculations reconcile to the supplied records, with units and dates labeled.
  • Assumptions and missing information are visible, including the changed scenario.
  • The recommendation follows the evidence and explains an important limitation.
  • The six lesson outputs form a usable handoff that another learner can check.
Open the full course project
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Before you begin

The idea in everyday life

T1 practice tote sells for $25 including shipping. Costs: acquisition $8, cleaning $1, packaging $1, shipping $6. Invented marketplace fee is 10% of the total price plus $0.50. Labor takes 20 minutes, valued for comparison at $12 per hour. Tax and fixed overhead are excluded.

The idea

The sale price is not the amount you keep. Count acquisition, preparation, delivery and fees.

Follow along

Calculate the true item contribution — worked practice

The sale price is not the amount you keep. Count acquisition, preparation, delivery and fees.

T1 practice tote sells for $25 including shipping. Costs: acquisition $8, cleaning $1, packaging $1, shipping $6. Invented marketplace fee is 10% of the total price plus $0.50. Labor takes 20 minutes, valued for comparison at $12 per hour. Tax and fixed overhead are excluded.

  1. 1. Calculate fee

    Apply 10% to $25 and add $0.50.

    You should see: Fee is $3.

    Fixed and percentage fees both matter.

  2. 2. Total cash costs

    Add 8 + 1 + 1 + 6 + 3.

    You should see: Cash costs are $19.

    Include shipping even when called free to the buyer.

  3. 3. Find contribution

    Subtract $19 from $25.

    You should see: Contribution is $6 before labor, tax and overhead.

    Revenue is not profit.

  4. 4. Value time

    Convert 20 minutes to one-third hour and multiply by $12.

    You should see: Time value $4; contribution after this time allowance $2.

    A cash margin can hide a poor return on time.

Now change one thing

An item sells for 30 with total cash costs 22 and labor allowance 5. Enter contribution after the labor allowance.

Your work

What to finish

An item cost sheet including fees, shipping and time.

Common mistake

Watch for this

Ignoring shipping because the listing says free shipping.

How can I tell I understand it?

Explain your calculation or classification and reproduce the changed case without copying the worked result.

Try 3 questions

Quick knowledge check

Answer all 3 questions. Get at least 2 right and the lesson completes automatically.

Not yet passed

You’ll get an explanation for each answer. Signed in? Your results save to your account.

1A $40 sale has a fictional fee of 5% plus $1. Fee is?
2Sale price is 35 and all cash costs total 27. Contribution before time is?
3Thirty minutes valued at $14 per hour represents time cost of?
0 of 3 answeredApply the lesson to a short question, then review the explanation.
2
Finish this lesson

Pass the check. We’ll save the progress.

Answer all 3 questions above and get at least 2 right. You can review the explanations and try again.

Go to the knowledge check
Optional course overview video · same video as Lesson 1
EdspiraHow to calculate Gross Profit (aka Gross Margin)YouTube
Optional course overview

How to calculate Gross Profit (aka Gross Margin)

From Edspira. Watch here or open it on YouTube .

Optional course overview. Follow the written steps below at your own pace.
Tools, templates, and lesson sources

Tools and templates

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Sources and further reading

Explore the references behind this lesson.

How to Prepare and Send a Package
Source & access notes · checked 2026-09-12

Inspected package measurement, preparation and postage inputs; no current rate is copied.

Access: Public page inspected without a sign-in; linked services may have separate requirements.

Reuse: Link to the original. Free reading does not imply permission to reproduce the page; lessons and fixtures here are original.

eBay Selling Fees
Source & access notes · checked 2026-09-12

Inspected fee categories and bases. The exercise uses invented fees, not an eBay rate quote.

Access: Public page inspected without a sign-in; linked services may have separate requirements.

Reuse: Link to the original. Free reading does not imply permission to reproduce the page; lessons and fixtures here are original.

Financial Accounting Index — Edspira gross profit example
Source & access notes · checked 2026-09-12

Inspected the Calculating Gross Profit link to 4PvUFaeHdIg. YouTube oEmbed confirms the exact title and Edspira channel; used only as a merchandise-cost introduction.

Access: Public page inspected without a sign-in; linked services may have separate requirements.

Reuse: Link to the original. Free reading does not imply permission to reproduce the page; lessons and fixtures here are original.

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