Dropshipping Margin Calculator

Calculate your true dropshipping profit after supplier costs, ads, platform fees, returns, and refunds. Analyze per-order and monthly profitability.

Using default platform fees, return/refund rates, and fixed costs

Revenue

Selling Price

Your product listing price

Orders Per Month

orders

Expected monthly order volume

Costs

Supplier Cost

What you pay the supplier per item

Ad Spend Per Sale

Average advertising cost to acquire one sale

Profitability Analysis

Profit Per Order

$16

After all per-order costs

Monthly Profit

$1,484

From 100 orders

Profit Margin

39.1%

Per-order margin

Break-Even Orders

6 orders/mo to cover fixed costs

ROAS

5.0x

Revenue per ad dollar

Cost Breakdown

Profit

Supplier Cost

Ad Spend

Processing Fee

Returns

Refunds

Per-Order Breakdown

Selling Price$40

Supplier Cost-$12

Ad Spend-$8

Platform Fee-$0

Processing Fee-$1

Returns-$2

Refunds-$1

Profit Per Order$16

Monthly Revenue

$3,999

100 orders x $40

Total Per-Order Costs

$24

All costs before fixed expenses

Tip: Most successful dropshippers target 15-30% profit margins. Below 15%, one bad return can wipe your profits.

Using 0% platform fee, 2.9% processing, 5% returns, 3% refunds, $79/mo fixed costs.

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  src="https://calcfalcon.com/embed/side-hustle/dropshipping-margin-calculator"
  width="100%"
  height="500"
  frameborder="0"
  title="Dropshipping Margin Calculator"
></iframe>

Frequently Asked Questions

What is a good profit margin for dropshipping?

Successful dropshippers typically target 15-30% profit margins per order. Products under $50 often need 20%+ margins to be worthwhile, while higher-priced items can work at 15%. Always factor in returns, refunds, and advertising costs — they can cut margins significantly.

How much does it cost to start dropshipping?

Startup costs are relatively low: Shopify plan ($39-79/month), domain ($12/year), and initial ad budget ($200-500). The main ongoing cost is advertising, which typically runs $5-15 per sale depending on your niche and targeting effectiveness.

What is ROAS and why does it matter?

ROAS (Return on Ad Spend) measures revenue generated per dollar spent on ads. A 3x ROAS means every $1 in ads generates $3 in revenue. Most profitable dropshippers aim for 3-5x ROAS. Below 2x, ad costs likely exceed margins.

How do returns and refunds affect dropshipping profit?

Returns and refunds are often overlooked but can significantly impact margins. A 5% return rate and 3% refund rate on a $40 product costs $3.20 per order on average. Build these into your pricing — industry average return rates for e-commerce are 15-20% for clothing and 5-10% for other products.

How to Use the Dropshipping Margin Calculator

Dropshipping margins are thinner than most people expect. This calculator accounts for every cost that eats into your profit — supplier pricing, advertising, platform fees, payment processing, returns, and refunds — so you can see your true per-order and monthly profitability before committing to a product.

Quick Mode

Enter your selling price, supplier cost, ad spend per sale, and monthly order volume. The calculator applies default Shopify fees (2.9% payment processing), a 5% return rate, 3% refund rate, and $79/month in fixed costs. This gives you a fast read on whether a product is worth testing.

Advanced Mode

Switch to Advanced to customize your platform (Shopify, WooCommerce, or Amazon), adjust fee percentages, set your actual return and refund rates, and enter your real monthly fixed costs. Amazon sellers should note the 15% referral fee, which significantly changes the margin picture compared to self-hosted platforms.

Understanding Your Numbers

Focus on three key metrics: profit margin (aim for 15-30%), break-even orders (how many sales you need to cover fixed costs), and ROAS (target 3x or higher). If your profit margin is below 15%, a single return can eliminate all profit from multiple orders. If your ROAS is below 2x, advertising costs are likely unsustainable.

Pricing Strategy

Work backward from a target margin. If your supplier charges $12 and you want a 25% margin after all costs, your minimum selling price needs to account for ads, fees, and returns on top of the supplier cost. Use this calculator to test different price points and find the sweet spot between competitiveness and profitability.

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