Dropshipping profit margin calculator
Work out what you keep on each order, and how high your ad cost can go before a product stops paying.
- Profit margin
- Payment fees
- Break-even ad cost per order
- Break-even ROAS
If your ad cost per order goes above the break-even figure, the product loses money on every sale.
How to calculate dropshipping profit margin
Profit per order is the selling price minus product cost, shipping, payment fees, and the ad cost to get that order. Profit margin is that profit divided by the selling price.
Example: a product sells for $39. It costs $6.20, shipping is $2.10, payment fees are 3% ($1.17), and ads cost $15.00 per order. Profit is $39 − $6.20 − $2.10 − $1.17 − $15.00 = $14.53, a margin of about 37%.
What break-even ROAS means
ROAS is revenue divided by ad spend. Break-even ROAS is the point where ads eat all the profit: selling price divided by what is left before ads. In the example, $39 ÷ $29.53 is about 1.3. Below 1.3 every sale loses money; a common target for raising budget is 2.0 or higher.
Common questions
What is a good profit margin for dropshipping?
Many sellers aim for 20% to 30% after ads. Below about 15% there is little room for refunds, chargebacks, or a rise in ad costs.
What costs do beginners forget?
Shipping, payment fees, refunds, and the real cost of ads. Comparing suppliers on product price alone, instead of landed cost, is the most common mistake.
How do I lower my break-even ROAS?
Raise the selling price, find a supplier with a lower landed cost, or sell a bundle so each order is worth more.
Next: why landed cost matters, how much to spend on a first ad test, or check a product with a Go / No-Go score.
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