Net Profit Per Sale
$3.25/unit
≈ 10.8% Margin
💵 Selling Price$29.99
📦 COGS−$7.50
🚚 Shipping−$3.50
📣 Ad Spend (CAC)−$12.00
💳 Payment Processing−$1.17
⚙️ Platform / Fixed−$0.33
Net Profit Per Order$5.49
📊 Monthly Revenue$8,997
💰 Monthly Net Profit$1,647
🎯 Break-Even Orders~21 orders
📈 ROAS2.50×
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How Your Dropshipping Profit Works
Four inputs. Five outputs. One clear picture of unit economics.
$COGS
Product cost from supplier. Sourcing from AliExpress, Oberlo, or private suppliers. The lower, the better — but quality matters.
%Margin
Net profit ÷ selling price × 100. Healthy dropshipping margin is 15–30%. Above 30% is a premium product winner.
🎯CAC
Customer acquisition cost — total ad spend to get one paying customer. Rule: keep CAC below 33% of AOV (average order value).
✖Break-Even
Fixed costs ÷ profit per order. Tells you how many orders before you're profitable. Use this to set daily ad budget targets.
Pricing Scenario Comparison
Quick reference: how pricing your product at $19, $29, $39, $49, $59 changes the picture.
| Price Point | COGS | Shipping | Payment | Ad Spend | Net Profit |
|---|
| $19.99 | $7.50 | $3.50 | $0.88 | $12 | −$3.89 |
| $29.99 | $7.50 | $3.50 | $1.17 | $12 | $5.82 |
| $39.99 | $7.50 | $3.50 | $1.46 | $12 | $15.53 |
| $49.99 | $7.50 | $3.50 | $1.75 | $12 | $25.24 |
| $59.99 | $7.50 | $3.50 | $2.04 | $12 | $34.95 |
| ✅ Recommended | Price above your CAC + COGS + shipping + processing threshold | $25–35 |
FAQ
Top dropshipper pricing questions, answered.
What is a good profit margin for dropshipping?+
A healthy dropshipping profit margin is 15–30% of revenue. Top-performing stores target 25–45% margin by sourcing cheap and pricing at 2.5× to 4× COGS. Below 15% margin is risky — ad volatility and payment holds can wipe you out.
How do you calculate dropshipping profit?+
Dropshipping profit = Selling Price − COGS − Shipping Cost − Payment Processing (2.9% + $0.30) − Platform Fee (amortized) − Ad Spend per Sale (CAC). Use our free dropshipping profit calculator above to test multiple pricing scenarios in seconds.
How much should I mark up my dropshipping product?+
As a rule of thumb: mark up 2.5× to 4× your COGS. If a product costs $5, sell it for $15–$20. If it costs $15, price it at $39–$59. The higher the product cost, the lower your markup percentage. Test 3 price points to find where conversion × margin peaks.
What Shopify fees cut into my profit?+
Shopify charges: (1) Monthly subscription $29–$299+; (2) Credit card rates 2.9% + $0.30 per transaction (Basic plan); (3) Third-party payment gateway fees. Transaction fees eat 2–5% of every sale. Factor these into every product you price.
Is dropshipping still profitable in 2026?+
Yes. Dropshipping remains profitable in 2026 — but it's more competitive and requires a real brand strategy. 2026 winners focus on: (1) Niche-specific products; (2) Higher-ticket ($80–$200) items; (3) Post-purchase upsells; (4) Email/SMS retention; (5) TikTok/FB micro-influencer traffic instead of pure paid ads.
How do I reduce my customer acquisition cost (CAC)?+
Strategies: (1) Test 5+ ad creatives per campaign — creative beats targeting; (2) Improve offer (free shipping over $X, BOGO); (3) Add subscription / bundling to increase AOV; (4) Organic TikTok/Reels as free top-of-funnel; (5) Post-purchase upsells & email retargeting; (6) Kill losing ad sets fast (3-day kill rule).