Dropshipping Profit Calculator

Calculate profit margins, costs breakdown, and ROI for your dropshipping business including all fees, shipping, and advertising costs.

Key Benefits:

  • Calculate exact profit margins and monthly profitability
  • Analyze complete cost breakdown including all fees
  • Determine optimal pricing strategies for maximum profit
  • Identify break-even points and scaling opportunities
  • Compare different suppliers and product scenarios
  • Optimize advertising spend for better ROI
  • Plan sustainable business growth with accurate metrics
  • Share calculations with partners or advisors

Dropshipping Business Parameters

Enter your product pricing, costs, and business metrics to calculate your dropshipping profit and margins.

Share Your Scenario

Copy link with your current inputs

Dropshipping business parameters

Product Pricing

Core pricing information for your dropshipping product.

$

The price you sell the product for on your store

$

The cost you pay to your supplier per unit (including any supplier fees)

Average number of units you sell per month

Shipping & Returns

Shipping costs and return rates that impact your profitability.

$

Cost of shipping each unit to the customer (what you pay, not what customer pays)

%

Percentage of orders that are returned or refunded

Platform & Payment Fees

Platform and payment processing fees as a percentage of sales.

%

Platform fees (Shopify, WooCommerce, etc.) as a percentage of sales

%

Payment processor fees (Stripe, PayPal, etc.) as a percentage of sales

Marketing & Business Costs

Advertising costs and fixed business expenses.

$

Average cost of advertising to acquire one sale (Facebook ads, Google ads, etc.)

$

Monthly fixed expenses (software subscriptions, virtual assistant, etc.)

%

Your estimated tax rate on business profits

Example: Tech Gadget Dropshipping

• Selling Price: $39.99/unit

• Product Cost: $15.00/unit (from supplier)

• Shipping: $5.99/unit

• Platform & Payment Fees: ~6% of sales

• Ad Spend: $8.00/sale

Result: ~$8.50 profit per unit at 100 units/month

Dropshipping Profit Analysis

Monthly Profit

$47.37

After all costs and taxes

Profit Margin

1.2%

Percentage of revenue as profit

Monthly Revenue

$3,999.00

Total sales before costs

Profit per Unit

$0.47

Profit earned per unit sold

Cost Breakdown

Product Costs
$1,500.00
37.5% of revenue
Shipping Costs
$599.00
15.0% of revenue
Platform Fees
$115.97
2.9% of revenue
Payment Fees
$115.97
2.9% of revenue
Advertising
$800.00
20.0% of revenue
Return Costs
$104.95
2.6% of revenue

Business Metrics

58
Break-even Units
Units needed to cover fixed costs
$568.42
Annual Profit
Projected yearly profit
$0.27
Effective Hourly Rate
Based on 40 hours/week

Low Profit Margins

Your profit margin of 1.2% is below the recommended 20% for sustainable dropshipping. Consider optimizing your cost structure or increasing prices.

Unit Economics

You're making $0.47 profit per unit sold. Your total cost per unit is $31.31, which represents 78.3% of your selling price.

Break-even Analysis

You need to sell at least 58 units per month to cover your fixed costs. Currently selling above your break-even point.

Time Value

Based on a 40-hour work week, your effective hourly rate is $0.27. Consider ways to increase efficiency or scale your business.

Frequently Asked Questions

What profit margin should I aim for in dropshipping?

A healthy dropshipping profit margin is typically 20-30% or higher. This gives you room for unexpected costs, advertising experiments, and business growth. Margins below 15% are generally not sustainable long-term.

How do I calculate my total cost per unit?

Total cost per unit includes: product cost + shipping cost + platform fees + payment processing fees + advertising cost per sale. Our calculator automatically computes this for you.

What should I include in monthly fixed costs?

Include recurring expenses like: platform subscriptions (Shopify, etc.), software tools, virtual assistant costs, domain/hosting fees, and any other monthly business expenses that don't vary with sales volume.

How does the return rate affect profitability?

Returns reduce profitability because you lose the revenue but still incur product and shipping costs. A 5-10% return rate is typical for dropshipping, but this varies by product category and quality.

What advertising cost per sale is reasonable?

Advertising cost per sale should ideally be 15-25% of your selling price for sustainable growth. If it's higher, focus on optimizing your ad campaigns or increasing your product prices.

Should I include taxes in my calculations?

Yes, always include your estimated tax rate in profitability calculations. The calculator applies taxes to your profit after all expenses, giving you a realistic after-tax profit figure.

How do I improve my dropshipping profit margins?

Improve margins by: negotiating better supplier prices, finding faster/cheaper shipping options, optimizing ad campaigns, increasing selling prices, reducing return rates through better product descriptions, or adding upsells.

What is a good break-even point for dropshipping?

Your break-even point should be achievable within your first few months. If you need to sell hundreds of units just to cover fixed costs, consider reducing fixed expenses or improving your unit economics.

Related Calculators

Explore more tools to help with your business decisions

Breakeven Analysis

Calculate the point where total revenue equals total costs to determine profitability.

Business Planning

Etsy Profit Calculator

Calculate true profit margins on Etsy sales including fees, materials, and time investment.

E-commerce & Marketing

Merch Profit Calculator

Calculate detailed profits for your merchandise business including all costs, fees, and margins.

E-commerce & Marketing

Marketing Ad Spend Calculator

Optimize your advertising budget allocation across different marketing channels and campaigns.

E-commerce & Marketing

App Store Revenue Calculator

Calculate your mobile app revenue, profit margins, and break-even point including platform fees and marketing costs.

E-commerce & Marketing
Results are estimates for informational purposes only. Consult professionals for important decisions.

Need More Business Tools?

Explore our complete collection of simple calculators designed to help entrepreneurs start and grow their businesses.

  • Simple, easy-to-use calculators
  • Instant results with clear explanations
  • Free to use, no signup required
View All Calculators
Suggest a Calculator

Help us improve

Found an error or have a suggestion? Let us know and we'll make it better.