We were struggling with cost basis issue because they were all purchased for personal use but some of the outfits were only worn once (think $60-80 per baby outfit) and others were never worn.  So using Thrift Store values didn't seem proper, but original cost isn't either.  Are you saying to report on a Schedule C and claim only the loss for shipping and Paypal fees?  And use the selling price as the cost basis, or net zero??