Free tool, no sign-up
Dropshipping profit margin calculator
Enter the product cost, shipping and your selling price: you instantly see what you earn per sale and how much you can spend on ads.
Result
Profitable
The margin leaves room for advertising and the unexpected.
Profit per sale
€7.20
- Maximum ad cost per sale
- €19.20
- Above this, every sale loses you money.
- Break-even ROAS
- 1.56
- Minimum revenue for €1 of advertising.
- Net margin
- 24.1%
- Markup
- ×2.99
- Target: 3× or more
- Suggested price (3×)
- €29.90
- Profit for 100 sales
- €720.15
- Excluding Shopify subscription and apps.
- Product + shipping€10.00(33 %)
- Payment fees€0.70(2 %)
- Advertising€12.00(40 %)
- Profit€7.20(24 %)
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How to calculate your dropshipping margin
Dropshipping margin is calculated per sale: what the customer pays, minus everything that sale costs you. Here are the four numbers the calculator gives, and how to work them out by hand.
Profit per sale
Selling price excl. VAT − product cost − shipping − payment fees − advertising
What's really left in your pocket after a sale. If you don't charge VAT, use the displayed price; if you do, divide it by 1.2 (at a 20% rate).
Markup
Selling price ÷ (product cost + shipping)
The most common benchmark in dropshipping: a markup of 3× or more usually leaves enough margin to pay for ads.
Maximum ad cost per sale
Selling price excl. VAT − product cost − shipping − payment fees
What you can spend on advertising to get one sale without losing money. It's your break-even point.
Break-even ROAS
Selling price ÷ maximum ad cost per sale
The revenue each euro of advertising must bring in to break even. If your ads do less, they're costing you money.
Example
A product bought for €8, €2 shipping, sold for €29.90 without VAT. Payment fees come to about €0.70. The maximum ad cost is therefore €19.20 per sale, a break-even ROAS of 1.56. If ads cost €12 per sale, €7.20 of profit is left.
What margin should you aim for in dropshipping?
- A markup of at least 3×: a product delivered at €10 sells for €29.90 or more.
- A selling price between €20 and €60: enough to pay for ads, low enough for an impulse buy.
- An ad cost per sale well below the maximum: keep a safety margin for returns, refunds and slower days.
- Bundle offers: a second item with a small discount raises the order value without costing more in ads.
Go further:
Frequently asked questions
How do I calculate a dropshipping product's margin?
Take the selling price (excluding VAT if you charge it), subtract the product cost, shipping, payment fees and ad cost per sale. The result is your profit per sale. The calculator above does it automatically.
What's a good markup in dropshipping?
A 3× markup is a common benchmark: the selling price is at least 3 times the delivered product cost. Below that, advertising quickly absorbs the whole margin.
What is break-even ROAS?
It's the minimum revenue €1 of advertising must generate for you not to lose money. Divide the selling price by the maximum ad cost per sale. For example, a break-even ROAS of 1.6 means each euro of ads must bring in at least €1.60 in sales.
Should VAT be included in the margin?
Yes, if you charge it: collected VAT isn't yours, it goes to the tax authorities. Calculate your margin on the price excluding VAT. If you're not VAT-registered, the price you collect is entirely yours.
What payment fees should I count with Shopify?
With Shopify Payments on the Basic plan, count around 1.5% + €0.25 per payment with a European card. Rates vary by plan, country and card type: you can change them in the calculator.
Is the calculator free?
Yes, completely, with no sign-up. Nothing is saved: the calculation happens in your browser.
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