Profit Margin Calculator for Dropshipping

Last updated: February 18, 2026

This profit margin calculator helps you measure real per-order profitability in your ecommerce business. Add your product costs, shipping, transaction fees, and optional ad spend to see gross and net margins clearly. The goal is to remove guesswork and give you numbers you can use for pricing and budget decisions.

Calculator

How to Use This Tool

  1. Enter selling price and all variable order costs.
  2. Add transaction fee percentage based on your payment setup.
  3. Optionally include ad cost per order for realistic net margin.
  4. Calculate and compare gross margin versus net margin.
  5. Use break-even ad cost to guide your CPA targets.

Understanding Profit Margin

Gross margin helps you understand product-level economics before marketing spend. Net margin gives the full operational picture by including ad cost and additional per-order expenses. Strong decisions come from tracking both values together rather than only revenue growth.

If your net margin is too thin, you have limited room for ad volatility, refunds, and discounts. This calculator helps you identify safer margin targets before scaling campaigns.

FAQ

What margin should a dropshipping store target?

Targets vary by niche, but higher margins generally give more flexibility for ad testing and scaling.

Why is net margin lower than gross margin?

Net margin includes ad spend and extra costs that are not counted in gross margin.

Should I include discounts in selling price?

Yes. Use your average realized selling price after discounts for better accuracy.

What if net profit is negative?

Negative net profit means your current economics lose money per order and need pricing or cost improvements.

Can this be used for multi-product stores?

Yes. Run separate calculations by product to avoid blending different margin profiles.