Dropshipping Profit Calculator
Calculate net profit, profit margins, maximum allowable ad spend (CPA), and break-even selling prices for AliExpress, CJ Dropshipping, or Zendrop orders.
Per-Order Product & Shipping Costs
Dropshipping Net Profit Formula
Net Profit = Selling Price - [Supplier Cost + Supplier Shipping + Ad CPA + (Price × Gateway %) + Fixed Fee + (Price × Refund %)]- Direct Supplier Cost: Product cost plus international carrier postage charged by the supplier.
- Advertising CPA: Cost per acquisition (paid ad spend required to generate one sale).
- Refund Allowance: 3% to 8% reserve allocated for customer chargebacks, refunds, and lost packages.
- Max Allowable Ad CPA: The highest ad spend per conversion before the order loses money.
Step-by-Step Worked Example
Calculation Steps:
How to Use This Calculator
Assumptions & Limitations
- Assumes supplier fulfills directly to the customer with ePacket, YunExpress, or CJ Packet.
- Ad spend assumes tracked blended CPA.
Frequently Asked Questions
Why do so many dropshipping stores lose money?
Most failing stores fail because of advertising costs. While product gross margins may look high (e.g. 60%), an ad CPA of $25 on a $40 product quickly wipes out all profits once payment fees and refunds are deducted.
What is a good net profit margin for a dropshipping store?
A healthy dropshipping store typically operates with a 15% to 25% net profit margin after ad spend and product costs.
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