COREMBA

Liquidity$2 500
Free Strategy Tool

Dropshipping Profit Margin Calculator

AliExpress & Shopify

Gross Margin %33.3%

Output Benchmarks

Risky< 20%
One return kills 5 sales
Healthy20-30%
Sustainable margin
Elite> 30%
High-ticket or branded

How to use this Dropshipping Profit Margin Calculator

01

Input Data

Enter your current Dropshipping metrics into the labeled fields above.

02

Analyze Ratios

Instantly view efficiency ratios calculated against elite standards.

03

Optimize

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

The Core Equation

(Price - COGS - Ads) / Price × 100

Strategic Context

THE STRATEGIC VIEW

OPTIMIZING EVERYTHING IS A WASTE

A system is only as fast as its slowest part—the "Bottleneck."

The Conflict: Most managers try to make every department "efficient" simultaneously. This is a mathematical error.

The Truth: Making the marketing team 50% faster while the sales team is already at capacity is a total waste of money. You just created a pile-up.

The Fix: Find the "Neck" of the bottle. Focus 100% of your resources there. Ignore everything else until the bottleneck moves.

Operational Reality

THE ADS-EATING MARGIN

In Dropshipping, your COGS are usually higher (no bulk buy discount), but your overhead is lower. The killer is Ad Costs.

Since you don't own the product exclusivity, you compete on Ads. Your margin calculation is basically: Price - COGS - CPA (Cost Per Action).

THE 30% SURVIVAL RULE

In Dropshipping, Gross Margin is vanity; Net Margin is sanity.

You need a 30% Gross Margin cushion just to survive.

* 10% goes to Facebook Ads (if you are lucky).

* 5% goes to payment processing and Shopify fees.

* 5% goes to refunds and returns.

* Result: You keep 10% Net Profit.

If you start with 20% Gross Margin, you are mathematically destined to break even or lose money.

BREAK-EVEN ROAS

Your margin dictates your "Break-even ROAS".

* 50% Margin = Break-even at 2.0x ROAS.

* 20% Margin = Break-even at 5.0x ROAS.

Since 5.0x ROAS is incredibly hard to sustain on Facebook/TikTok, selling low-margin items makes your ads campaign "Default Dead".

Tactical FAQ

TACTICAL Q&A

Q: What is a good profit margin for dropshipping in 2025?
A: Aim for 20-30% Net Margin. This means after COGS, Ads, and Fees, you keep $20-$30 on every $100 sold. If your Net Margin is <15%, you are working for your supplier, not yourself.
Q: High ticket dropshipping profit margin vs Low ticket?
A: High Ticket wins. Selling one $500 item with 30% margin = $150 profit. Selling fifteen $10 items with 30% margin = $45 profit. The work is the same, but High Ticket scales without exponential support tickets.
Q: What is the average dropshipping profit margin?
A: The amateur average is ~10% (razor thin). The "Pro" average is 25-35%. The difference isn't the product; it's the Offer. Pros bundle products to increase AOV (Average Order Value), which artificially inflates their margin against fixed ad costs.
Recommended Course

Master The System

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

Source Lesson

Operations Mastery: Dropshipping Protocol

Start Lesson →

Related concepts

#EBITDA#ROI#Moat