Dropshipping Profit Margin Calculator
Enter what you pay your supplier and what you charge your customer. This tool instantly shows your profit margin, markup, and profit per order — plus a monthly projection if you add your sales volume.
Profit Margin Calculator
How to use this calculator
Fill in three numbers: what you pay your supplier, any extra cost you carry per order (shipping you cover, poly mailers, a branded insert), and the price you charge the customer. The result updates as you type — there's no submit button and nothing is sent anywhere, since the whole calculation runs in your browser.
If you already know roughly how many orders you get in a month, add that too. It won't change your margin percentage, but it turns an abstract "30% margin" into a concrete number you can compare against your rent, ad budget, or savings goal.
The formulas behind the numbers
Two numbers get confused constantly in dropshipping: margin and markup. Both describe the same profit, measured against a different base.
Because markup divides by the smaller number (cost) and margin divides by the larger number (selling price), markup is always a bigger percentage than margin for the same sale. Suppliers and manufacturers tend to talk in markup. Retailers, marketers, and P&L spreadsheets talk in margin. This calculator gives you both so you're never caught out in either conversation.
Worked example
Say you're dropshipping a phone accessory. Your supplier charges $9.00, and because you offer free shipping, you absorb a $3.50 shipping cost per order — so your total cost is $12.50. You list it for $29.99.
| Metric | Value |
|---|---|
| Total cost | $12.50 |
| Selling price | $29.99 |
| Profit per order | $17.49 |
| Profit margin | 58.3% |
| Markup | 139.9% |
At 200 orders a month, that's roughly $3,498 in gross profit before ad spend, payment fees, returns, and any other running costs are subtracted — which is exactly why this number is a starting point, not the finish line.
What counts as a "good" margin?
As a rough benchmark, many dropshippers treat anything under 15% as fragile, 15-30% as workable, and 30%+ as comfortable — but the percentage matters less than the dollar amount left over after every cost, including ads. A $40 profit at a 20% margin funds far more testing and scaling than a $2 profit at a 45% margin on a $4.50 item. Use the margin percentage to sanity-check pricing, and use the profit-per-order dollar figure to judge whether the product is actually worth your time.
Frequently asked questions
What is a good profit margin for dropshipping? +
Most dropshippers aim for a net profit margin somewhere between 15% and 30% once every cost is included — product cost, shipping, payment processing fees, and advertising. Margins below 15% leave very little room to run paid ads profitably, since ad spend alone often costs 10-20% of revenue. Margins above 40% are possible but usually mean either a low-competition product or a price point your market may push back on. There is no single "correct" number — a $15 impulse-buy accessory and a $150 niche gadget can both be healthy businesses at very different margin percentages, because the profit per order matters as much as the percentage.
What is the difference between margin and markup? +
Margin is profit divided by your selling price. Markup is profit divided by your cost. They describe the same $ profit but from two different bases, so markup is always a larger percentage than margin on the same sale. For example, a product that costs $10 and sells for $20 has a $10 profit: that is a 50% margin (10 ÷ 20) but a 100% markup (10 ÷ 10). Suppliers and manufacturers usually talk in markup; retailers and marketers usually talk in margin — mixing the two up is one of the most common pricing mistakes new dropshippers make.
Should I include shipping cost in my margin calculation? +
Yes. If you offer free shipping to the customer but pay for it yourself, that shipping cost is a real cost of the sale and belongs in the "additional costs" field of this calculator, right alongside your supplier price. Leaving it out is the single most common reason a product looks profitable on paper but loses money in practice.
Does this calculator account for payment processing fees or ad spend? +
This tool focuses specifically on product-level margin: supplier cost versus selling price, plus any per-order costs you add manually (like shipping). For a full breakdown of what PayPal, Stripe, or your gateway takes from each order, use the Payment Fee Calculator. For the ad spend side — whether your marketing budget still leaves you profitable — use the ROAS & Ad Spend Calculator. Using all three together gives you the complete picture before you commit budget to a product.
Why does my margin look fine here but my store still isn't profitable? +
Per-order margin is only one layer. Even a healthy 30% product margin can be wiped out by a high return rate, a payment gateway charging 4-5% per transaction, or an ad account spending more to acquire a customer than that customer is worth. If your per-order numbers look healthy but your bank balance disagrees, check your Break-Even Calculator result and your actual ROAS against the break-even ROAS this site's ROAS Calculator gives you — the gap is almost always in one of those two places.