Free Strategy Tool

AliExpress Markup Calculator

Q: Who pays for return shipping in AliExpress dropshipping?

**You do.** And because it costs $20 to ship back to China, you should never accept the return. Strategy: "Keep the item, here is a 50% refund." It is cheaper to lose 50% of the sale than to pay for return shipping and lose 100% + postage. Q: How do returns and refunds work if the item never arrived? A: You lose. AliExpress tracking is notoriously slow. If a customer opens a "Item Not Received" dispute, refund them immediately. A chargeback on your Stripe account hurts your "Merchant Health" far more than losing $15.

Q: Should I use AliExpress or US-based suppliers for higher margins?

Depends on your strategy. AliExpress = higher markup potential (3x-5x) but slower shipping (15-30 days) = higher refund risk. US suppliers = lower markup (2x-2.5x) but faster shipping (3-7 days) = higher conversion rates and fewer refunds. For beginners, start with AliExpress to test products, then switch to US suppliers for winners to scale with better margins and customer satisfaction.

Dropshipping Pricing Strategy

Unit Cost ($)

Selling Price ($)

Gross Margin %33.3%

Output Benchmarks

2x Markup100%

Break-even or loss

3x Markup200%

Survival margin

5x+ Markup400%+

Thriving margin

How to use this AliExpress Markup Calculator

Input Data

Enter your current Dropshipping metrics into the labeled fields above.

Analyze Ratios

Instantly view efficiency ratios calculated against elite standards.

Optimize

Compare your results with the Benchmarks on the right to find leverage points.

The Core Equation

(Selling Price - Cost) / Selling Price × 100

Strategic Context

THE STRATEGIC VIEW

Calculate optimal markup from AliExpress cost to Shopify selling price. Account for shipping delays, returns, and ad spend to determine the minimum 3x markup required for sustainable dropshipping margins.

Operational Reality

THE 3X RULE

The golden rule for AliExpress dropshipping: 3x Markup Minimum.

If you buy a product for $10 on AliExpress, sell it for $30 minimum. Here's why:

- Cost: $10 (AliExpress)

- Shipping: $0-$5 (ePacket or free shipping)

- Ad Cost: $5-$10 (Facebook/TikTok Ads to acquire customer)

- Returns/Refunds: 5-10% of orders will be lost to returns or disputes

- Shopify Fees: 2.9% + $0.30 per transaction

At 3x markup ($30 selling price), your net profit is ~$5-$8 per sale. At 2x markup, you break even or lose money.

THE TIERED PRICING STRATEGY

Use different markups based on product cost:

- $1-$10 products: 3x-5x markup (sell $10 item for $30-$50)

- $11-$50 products: 2.5x-3x markup (sell $20 item for $50-$60)

- $51+ products: 2x-2.5x markup (sell $100 item for $200-$250)

Low-cost items need higher markups because ad costs are fixed. A $5 Facebook ad to sell a $2 product is suicide.

THE REFUND BLACK HOLE

In classic retail, a return can be resold. In Dropshipping, a return is a Total Loss.

You cannot ship a $10 item back to China. It costs $20 to ship.

You must just refund the customer and eat the cost.

Your markup *must* cushion this "Refund Black Hole," or you will technically be profitable on ads but bankrupt in the bank account.

Tactical FAQ

TACTICAL Q&A

Q: What is the minimum markup for dropshipping from AliExpress?

A: 3x (200% markup) is the absolute minimum. If you buy for $10, sell for $30. Anything less and you'll lose money after ads, returns, and fees. High-performing dropshippers use 4x-5x markup on low-ticket items (<$20) because ad costs are fixed—spending $5 to acquire a customer who buys a $15 product leaves no profit.

Q: Who pays for return shipping in AliExpress dropshipping?

A: You do. And because it costs $20 to ship back to China, you should never accept the return. Strategy: "Keep the item, here is a 50% refund." It is cheaper to lose 50% of the sale than to pay for return shipping and lose 100% + postage.

Q: How do returns and refunds work if the item never arrived?

A: You lose. AliExpress tracking is notoriously slow. If a customer opens a "Item Not Received" dispute, refund them immediately. A chargeback on your Stripe account hurts your "Merchant Health" far more than losing $15.

Q: Should I use AliExpress or US-based suppliers for higher margins?

A: Depends on your strategy. AliExpress = higher markup potential (3x-5x) but slower shipping (15-30 days) = higher refund risk. US suppliers = lower markup (2x-2.5x) but faster shipping (3-7 days) = higher conversion rates and fewer refunds. For beginners, start with AliExpress to test products, then switch to US suppliers for winners to scale with better margins and customer satisfaction.

Output Benchmarks

2x Markup100%

Break-even or loss

3x Markup200%

Survival margin

5x+ Markup400%+

Thriving margin

Recommended Course

Master The System

This calculator is just one tactical step. The full strategy is documented in the core protocol.

Source Lesson

Finance & Capital: Dropshipping Protocol

Start Lesson →

Related concepts

#EBITDA#ROI#Moat