How It Works
Three simple steps to get accurate calculations
1
Enter Product Details
Input your selling price, product cost from supplier, and expected monthly sales volume to establish baseline metrics.
2
Add Shipping & Returns
Include shipping costs per unit and expected return rates to account for logistics and customer service expenses.
3
Configure Platform Fees
Set platform fees (Shopify, WooCommerce) and payment processing fees (Stripe, PayPal) as percentages of sales.
4
Include Marketing Costs
Add advertising cost per sale and monthly fixed costs to calculate true profitability after all expenses.
5
Analyze Results
Review detailed profit analysis, cost breakdown, and business insights to optimize your dropshipping strategy.
Loading Dropshipping Profit Calculator...
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.
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Results are estimates for informational purposes only. Consult professionals for important decisions.