Calculate the real profit margin on a dropshipping product after product cost, shipping, transaction fees, and ad spend.
All calculations run in your browser. Nothing is sent to a server. Last updated: 2026-07-19 · Formula verified against published sources (see below).
The Profit Margin Calculator takes the six numbers that actually determine whether a dropshipping product is profitable — selling price, product cost, shipping cost, payment processing fee, and ad cost per unit — and returns the real net profit per order and the real profit margin.
Most free dropshipping calculators only subtract product cost from selling price and call the result "profit." That number is wrong. Every real dropshipping order also loses money to payment processing fees (Stripe, PayPal, or Shopify Payments all take a cut) and to ad spend. If you don't include those costs in your margin calculation, you'll think you're profitable when you're not.
The calculator uses this formula, with each component shown explicitly:
The payment processing defaults are 2.9% + $0.30, which is Stripe's published US online rate as of July 2026 Source: stripe.com/pricing. PayPal's standard rate for goods and services is 2.99% + $0.49 Source: paypal.com/us/business/paypal-business-fees. Shopify Payments on the Basic plan matches Stripe at 2.9% + $0.30 Source: blog.dropcommerce.com. Adjust the fields if you're using a different processor or plan.
Ad cost per unit is total ad spend ÷ number of orders. If you spent $200 on ads and got 25 orders, your ad cost per unit is $8. This is the cost most beginners forget — they calculate "margin" as selling price minus product cost and think they're making $20 per order, when ads are eating $8 of it. The result is the difference between "profitable" and "going out of business in three months."
A realistic scenario for a mid-ticket dropshipping product. The numbers below match what's pre-filled in the calculator.
| Input | Value |
|---|---|
| Selling price | $40.00 |
| Product cost (COGS) | $15.00 |
| Shipping cost | $5.00 |
| Payment fee (2.9% + $0.30 on $40) | $1.46 |
| Ad cost per unit | $8.00 |
| Total cost per order | $29.46 |
| Net profit per order | $10.54 |
| Profit margin | 26.35% |
Without the ad cost and the Stripe fee, this product would have looked like a 50% margin ($40 − $20 = $20). With them, it's 26%. That's the difference the calculator exists to show.
If you scale this product to 100 orders per month, you'd make $1,054/month in net profit — assuming your ad cost per unit stays at $8 as you scale. (It usually doesn't. Read our article on profitable ROAS for why.)
The exact ROAS your ads need to hit to not lose money. Considers selling price, COGS, shipping, and transaction fees.
Net profit per order after every cost: COGS, shipping, transaction fees, ad spend, and a return-rate-adjusted allowance.
Find the selling price that hits a target margin after product cost, shipping, transaction fees, and ad spend per unit.
The exact math behind dropshipping profit margin, with a worked example and the three costs most beginners forget to include.
Benchmarks by product category, sourced from real ecommerce data, plus the margin range that actually survives ad spend.
A 50% markup is not a 50% margin. This article shows why mixing them up costs you money, with a real product example.