Well congratulations on your side gig and discovering a way to make a profit. So, first a definition of inventory: Inventory refers to a company's goods and products that are ready to sell, along with the raw materials that are used to produce them.
So, your net profit will be your sales $10K, less your platform fees, $2K, shipping costs, $1K (This can also be part of the inventory calculation. So before diving into inventory, your net profit is approximately $7K.
Let’s assume that your year end inventory is $3K. During the year, your purchased inventory cost is $5.4K above. That would mean that your cost of goods sold is $2.4K. So, your net profit now is $4.6K.
You can use this example to see what your potential net profit is. Keep in mind that I am assuming you also are going to have expenses for communications, internet and potentially computer and such as well.
Thank you for your question @DigitalNomad29 and best of luck in this new venture.
Be well and safe!
Marc T.
Turbo Tax Expert
27 Years of Experience Helping Clients
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