Model the effect of returns
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- An unpublished condition listing and package-measurement brief.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.
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The idea in everyday life
T1 retained-sale contribution is $6 before time. For a full return, assume the $25 is refunded and the $2.50 percentage fee is refunded; the fixed $0.50 fee is not. Cleaning $1, packing $1, outbound shipping $6 and return shipping $6 are not recovered. The item is recovered in its original condition and retains its $8 acquisition value. Ignore resale delay for this exercise.
A return can erase shipping and handling value even when the item is recovered. Define what is recoverable.
Model the effect of returns — worked practice
A return can erase shipping and handling value even when the item is recovered. Define what is recoverable.
T1 retained-sale contribution is $6 before time. For a full return, assume the $25 is refunded and the $2.50 percentage fee is refunded; the fixed $0.50 fee is not. Cleaning $1, packing $1, outbound shipping $6 and return shipping $6 are not recovered. The item is recovered in its original condition and retains its $8 acquisition value. Ignore resale delay for this exercise.
1. Find unrecovered costs
Add 0.50 + 1 + 1 + 6 + 6.
You should see: Net economic loss per returned attempt is $14.50 before time.
The recovered item value is kept separate.
2. Track cash tied up
Add the $8 acquisition cost to $14.50.
You should see: Net cash outlay remains $22.50 while the item is held.
Cash outlay and economic loss differ when inventory is recovered.
3. Model ten attempts
Assume nine retained and one returned.
You should see: 9 × $6 − $14.50 = $39.50 before time.
One return affects the group result.
4. Label assumptions
Record the full-return, percentage-fee-refund, nonrefundable fixed-fee and item-recovery assumptions as invented.
You should see: The scenario does not claim any platform guarantees this treatment.
Actual return and fee rules must be verified.
What to finish
A return scenario showing contribution, loss and cash tied up.
Watch for this
Assuming a recovered item means a return has no cost.
How can I tell I understand it?
Explain your calculation or classification and reproduce the changed case without copying the worked result.
Quick knowledge check
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Go to the knowledge checkOptional course overview video · same video as Lesson 1
How to calculate Gross Profit (aka Gross Margin)
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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.
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.
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