Per-sale profit margin for dropshipping after all costs

Dropshipping Profit Structure

Dropshipping business model: buyer orders through store, store forwards order to supplier, supplier ships directly to buyer. Store captures difference between selling price and supplier cost minus platform and advertising costs. Thin margins typical — 10-30% net margin on successful products, often lower or negative for products without clear differentiation. Calculator quantifies specific per-sale economics to evaluate product viability before scaling.

Typical Dropshipping Costs

Supplier cost: 20-40% of selling price typical for AliExpress/Oberlo products. Platform fees: Shopify 30 monthly plus 2.9% + 0.30 per transaction, Amazon 15% referral fee, eBay 10-13%. Ad cost per sale: 5-20 typical for Facebook/TikTok ads on commodity products, 2-8 for well-targeted niche products. Shipping: 2-15 depending on supplier and destination. Combined costs often 60-80% of selling price leaving 20-40% gross margin before paying yourself. Net margin often 5-15% for established dropshippers.

Worked Example for Typical Product

Selling price 50. Supplier 15. Platform 15% (7.50). Ad 10. Shipping 5. Total costs 37.50. Profit per sale 12.50. Margin 25%. Moderate dropshipping economics — viable at scale (100+ sales monthly produces 1,250+ profit) but not spectacular. Higher ad costs (20/sale) eliminate margin entirely — 2.50 per sale barely covers own time. Lower supplier costs or premium positioning dramatically improves margins. Specific product selection and differentiation determine economics.

What the Calculator Does Not Model

Customer service time and cost. Returns and refunds (typical 5-15% of sales). Payment processing chargebacks. Platform compliance issues (account suspensions). Time cost of store management. Specific niche market competition. Brand building value beyond single-sale economics. Scale benefits at higher volumes. Tax implications of business income. The calculator shows per-sale math; business viability requires scale considerations and risk management.

Dropshipping Viability

Calculator shows baseline economics. Profitable dropshipping requires: strong product selection (unique, high-margin, not widely available), good marketing and ad optimization (reducing CAC), customer service discipline (minimizing returns), scale (50-100+ daily sales for meaningful income). Most beginners fail at dropshipping due to: commodity product selection, poor ad targeting (high CAC), returns/refunds eating margins. Calculator helps identify viable product/price combinations before investing in testing.