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Dropshipping Profit Calculator
Use this free dropshipping profit calculator to see what each order really earns. Enter your selling price, supplier product cost, shipping, platform and payment fees, ad spend per order, and returns rate, and get profit per order, profit margin, break-even ad spend, and monthly profit.
| Figure | Per order |
|---|---|
| Selling price | $40.00 |
| Supplier product cost | −$12.00 |
| Shipping cost | −$5.00 |
| Platform fee (5%) | −$2.00 |
| Payment fee (2.9% + $0.30) | −$1.46 |
| Ad spend per order | −$8.00 |
| Expected returns loss (5%) | −$0.85 |
| Total costs | $29.31 |
| Profit per order | $10.69 |
| Monthly profit (100 orders) | $1,069.00 |
How it works
Dropshipping looks simple: a customer orders, the supplier ships, and you keep the difference. The difference is smaller than most beginners expect, because six separate costs eat into every sale before profit appears. This calculator lists them all, so you can see which one is doing the damage.
The costs are: the supplier's product cost, the shipping cost for the order, the platform or marketplace fee as a percentage of the selling price, the payment fee — usually a percentage plus a small fixed charge per transaction — the ad spend needed to win one order, and the expected loss from returns. The returns loss is spread across every order: a 5 percent return rate on a $12 product with $5 shipping means each order carries an expected loss of 5 percent of $17, or $0.85. You do not lose $17 on every order, but across 100 orders about five will come back, costing about $85 in total.
Profit per order = selling price − total costs
Profit margin = profit ÷ selling price
Break-even ad spend = selling price − all costs except ads
Two numbers matter most. Profit margin is profit divided by selling price, and a net margin of 15 to 30 percent is a realistic target for many dropshipped products. Break-even ad spend is the most you can pay for ads per order before the order loses money: the selling price minus every other cost. In the worked example it is $18.69, so an ad campaign that costs $8 per order is comfortably profitable, while one costing $20 per order would lose money on every sale even though the product itself looks profitable.
Monthly profit simply multiplies the per-order profit by your order count. That is where volume shows its power — and its danger. At $10.69 of profit per order, 100 orders a month earn $1,069. But the same multiplication applies to losses: if ad costs creep up and profit per order falls to minus $1, those 100 orders lose $100 a month. Check the per-order number first, then scale it.
Worked example
You sell a lamp for $40. The supplier charges $12 per unit and $5 for shipping. The platform takes 5 percent, the payment processor takes 2.9 percent plus $0.30, you spend $8 on ads per order, and 5 percent of orders are returned. You get 100 orders a month.
Step 1: Platform fee — 5% × $40 = $2.00. Payment fee — 2.9% × $40 + $0.30 = $1.46.
Step 2: Returns loss — 5% × ($12 + $5) = $0.85 per order.
Step 3: Total costs — $12 + $5 + $2.00 + $1.46 + $8 + $0.85 = $29.31.
Step 4: Profit per order — $40 − $29.31 = $10.69. Profit margin — $10.69 ÷ $40 = 26.7%.
Step 5: Break-even ad spend — $40 − ($29.31 − $8) = $18.69. Monthly profit — $10.69 × 100 = $1,069.00 on $4,000 of monthly revenue.
The tool gives a profit of $10.69 per order, a 26.7% margin, and a monthly profit of $1,069.00. The product itself is healthy, but notice how much of the price goes to ads and fees: $11.46 of the $40, nearly a third. If the supplier raised the product cost to $18, profit would fall to $4.39 and the margin to 11.0 percent — the same product, a very different business. That is why checking every cost, not just the product price, is the whole point of this calculator.
FAQ
What is a good profit margin for dropshipping?
A net margin of 15 to 30 percent per order is a realistic target for many dropshipped products after supplier cost, shipping, platform and payment fees, ad spend, and returns are counted. Margins below 10 percent leave almost no room for a bad ad week or a spike in returns. In the worked example, a $40 sale leaves $10.69 of profit, a 26.7 percent margin.
What is break-even ad spend?
Break-even ad spend is the most you can spend on ads per order before the order stops making money: the selling price minus every other cost. In the worked example, the price is $40 and all costs except ads total $21.31, so break-even ad spend is $18.69 per order. Spend less than that per order and the order is profitable; spend more and it loses money.
How do returns affect dropshipping profit?
A returned order usually loses the product cost and the shipping you already paid, and often the refund of the payment fee too. This calculator spreads that loss across all orders: at a 5 percent return rate with $12 product cost and $5 shipping, each order carries an expected returns loss of $0.85. A product with a 15 percent return rate would carry three times that loss, which is why return-prone products are hard to make profitable.
Should shipping be free for the customer?
Free shipping usually raises conversion, but you still pay the supplier's shipping cost, so it comes out of your margin. Test it with this calculator: raise the selling price to cover the shipping cost and compare the profit per order with charging shipping separately. If free shipping lets you raise the price by more than the shipping cost, it wins; if it does not, charging shipping is the better deal.
How is this different from a Shopify profit calculator?
A store profit calculator works from the costs of a shop you run yourself, while this one is built around the dropshipping model: a supplier's product cost, per-order shipping, marketplace or platform fees, ad spend per order, and a returns rate. If you hold your own stock and ship it yourself, a general store profit calculator fits better; if a supplier ships each order for you, use this one.