Matt,
Agreed, of course its not all profit. Maybe you should contact him to post up stock on bT Auctions, where the costs are cheaper. That will increase the margins.
I often wonder, just how much your IRS and our Inland Revenue watch such auctions. That seller is still "small fry" to some of the businesses being run. They must have a level at which they start to investigate that ALL is being declared.
Just a few years back they started putting V.A.T (sales tax) onto the listing and final sales fee costs, but how much actually gets declared in final year tax returns.
Oh, the complexities of the internet !
Regards,
Ian.