Dropshipping profit

Dropshipping profit calculator guide

Dropshipping profit can disappear when shipping, fees, refunds, discounts, and ad spend are counted. Use contribution margin before deciding whether an offer can scale.

What this means

A dropshipping offer needs enough margin to pay for acquisition. Low product cost is not enough if shipping, long delivery refunds, payment fees, or discounts consume the room available for ads.

Formula

contributionMargin = netRevenue - productCost - shipping - packaging - fees - refundImpact

Example

If a product sells for $39 with a 10% discount, $13 cost, $6 shipping, $1 packaging, $1.30 in fees, and $2 refund impact, contribution margin is about $11.60 before ads.

Common mistakes

  • Only comparing selling price to supplier product cost.
  • Forgetting refunds caused by delivery time, sizing, or expectation mismatch.
  • Using one blended shipping estimate for all products.
  • Ignoring break-even CPA before testing ads.

Calculator

Use SellMira to calculate dropshipping contribution margin, break-even CPA, and break-even ROAS.

Calculate dropshipping profit