Dropshipping Profit Calculator

Back out every cost on a dropshipped order, supplier, shipping, ads, processing, refunds, to see real profit per sale and how much ad spend you can afford.

Your numbers

Your CAC. Total ad spend divided by number of orders.

Your profit

Net profit per order

$12.27

Net margin

35.1%

Breakeven ad spend per sale

$21.27

Maximum you can pay to acquire a customer before the order loses money. Keep your CAC well below this.

Gross revenue$34.98
Product cost-$11.00
Ad spend-$9.00
Processing fee-$1.31
Refund allowance-$1.40

How to calculate real dropshipping profit

Enter retail and supplier prices

Retail is what the customer pays. Supplier cost is what you pay your AliExpress/CJ/Spocket/Zendrop supplier, plus their shipping to the customer. Both matter.

Add your real ad spend per sale

Total monthly ad spend divided by number of orders. Not your ROAS, not your CPM. Just cost per actual order. This is the biggest expense that sinks dropshipping stores.

Factor in refunds and processing

Dropshipping refund rates run 3-8% depending on supplier quality. Processing is 2.9% + $0.30 for Shopify Payments, similar for Stripe. These kill margins quietly.

Why most dropshipping stores lose money

The promise is simple: high markup, no inventory. The reality is profit that evaporates into ads, fees, and refunds unless you track carefully.

Ad spend eats the markup

Facebook and TikTok CPAs for dropshipping are typically $8-25 per order. If your margin after supplier cost is $15, you have almost nothing left. Model the full cost stack before picking a product.

Refund rates are the silent killer

Supplier quality varies. A 5% refund rate doesn't just cost you 5% of revenue, you still pay the original ad spend, processing fees, and often return shipping. True cost of a refund is 1.5-2x the order value.

Payment processing compounds

Shopify Payments and Stripe charge 2.9% + $0.30 on every transaction. On a $30 order that's $1.17 gone before anything else. Over 1,000 orders a month, processing alone is over $1,000.

Know your breakeven CAC

The calculator shows your maximum affordable ad spend per sale. If your current CAC is close to this number, you're running on razor-thin margins. Push products up to 3-4x markup to give yourself room.

The 3-5x markup rule for dropshipping

Successful dropshippers target 3-5x markup over supplier cost. A $8 product sells for $24-40. This leaves room for ads, processing, refunds, and still delivers 20-30% net margin.

Add reviews for higher pricing power

Dropshipping stores without reviews are forced to compete on price. Stores with 50+ verified reviews can charge 20-40% more for the same product because shoppers trust the purchase. Reviews are the cheapest way to lift margins.

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FAQs

Common questions about dropshipping profitability.

15-30% net margin after all costs is considered healthy. Below 15% is risky, small changes in ad costs, refunds, or exchange rates can flip you to negative. Above 30% is rare and usually means a unique product with low competition.
Usually one of: ad spend per order is too high (above breakeven), supplier cost is too high for the retail price, refund rate is higher than expected, or processing fees eat the remaining margin. Run this calculator with your real numbers, the weak point will be obvious.
Meta and TikTok CAC for dropshipping products ranges $8-25 depending on category. Impulse/viral products trend lower ($5-12), solving-a-problem products trend higher ($15-30). Keep your CAC below 40% of your retail price for sustainable margins.
For sustainable businesses, yes. Price your time at $20-50/hour and factor in hours per week spent on ads, support, and order management. Many dropshippers show a 'profit' that disappears when their hourly cost is included.
Inventory gives you better margins (you buy in bulk at lower unit cost) but more capital risk. Dropshipping gives you flexibility but ad spend eats more of your margin. Run both scenarios here and decide based on your risk tolerance and cash.