How to calculate dropshipping profit: complete guide with free simulator

One of the most common questions when starting dropshipping is: how much will I actually make per sale? The answer is not as simple as subtracting the supplier cost from the selling price, because shipping, platform fees and advertising all take a significant cut of your revenue along the way.

In this guide we explain how to calculate net profit in dropshipping step by step, which formulas to use, and how to use our dropshipping profit simulator to make decisions before launching a product.

What is net profit in dropshipping?

Net profit is what remains from each sale after paying all associated costs. Don't confuse gross profit (which only subtracts product cost) with net profit, which includes all real expenses:

• Product cost: what you pay the supplier per unit.
• Shipping cost: what you pay to deliver the order to the customer.
• Platform fee: the percentage Shopify, Amazon, eBay or another platform takes from each sale.
• Ad spend: the cost per sale from your Facebook Ads, Google Ads or TikTok Ads campaigns.

The formula is:

What is net margin and why does it matter?

Net margin is the percentage of the selling price that becomes real profit:

For example, if you sell a product for $30 and the net profit is $7.50, your margin is 25%. This is more useful than profit in dollars because it lets you compare products at different price points.

As a general reference:

• Margin ≥ 25%: excellent — you have room to scale and absorb unexpected costs.
• Margin 15 – 25%: healthy, viable if you control costs carefully.
• Margin < 15%: fragile — any rise in CPA or shipping cost can push you into loss.
• Negative margin: you're losing money on every sale and need to rethink the product.

A practical calculation example

Imagine you're selling a phone case in your Shopify store:

• Selling price to customer: $19.99
• Product cost from supplier: $4.50
• Shipping cost: $2.80
• Shopify + payment gateway fee (~3%): $0.60
• Facebook Ads spend per sale: $3.50

Total costs: 4.50 + 2.80 + 0.60 + 3.50 = $11.40

Net profit: 19.99 − 11.40 = $8.59

Margin: (8.59 / 19.99) × 100 = 43% — excellent.

Now tweak the numbers in our dropshipping simulator and watch the results update in real time without doing any manual maths.

Platform fees for the most popular dropshipping platforms

One of the variables that confuses beginners most is the platform fee. Here are the most common figures for 2026:

• Shopify Basic + Stripe: transaction fee of 2% + Stripe charge (~2.9% + $0.30 in the US). Total between 3% and 5% per sale.
• Amazon FBM (individual seller): between 8% and 15% depending on category. Electronics at 8%, clothing and accessories at 15%.
• eBay: final value fee of around 12.35% in most categories, plus a fixed fee in some.
• Etsy: 6.5% transaction fee + $0.20 listing fee + payment processing.
• WooCommerce: no direct platform commission — only the payment gateway (Stripe, PayPal, etc.).

The most common mistake: forgetting customer acquisition cost

Many dropshippers calculate gross margin (selling price minus supplier cost) and stop there. But the customer acquisition cost (CAC) — what you spend on advertising to generate one sale — is often the biggest expense of all and the one that fluctuates most.

A $5 CAC on a $20 product represents 25% of the selling price. If your gross margin was 50%, you're left with 25% net. If the CAC rises to $8 because click costs increase, your margin drops to 10%.

That's why the simulator includes an ad spend per sale field: so you factor it in from day one and don't get a nasty surprise when you launch campaigns.

Monthly projection: from single sale to business

Once you know how much you make per sale, the next step is projecting volume. If you sell 60 units a month at a net profit of $8 per unit, your monthly profit is $480. Scale to 200 units with the same margin and that's $1,600.

Our simulator calculates this projection automatically when you enter the number of units you expect to sell per month, showing both total profit and gross monthly revenue.

When it makes sense to scale a product

Before investing more in advertising to scale a product, make sure:

• Net margin is at least 20% with the current CPA.
• You've sold at least 20–30 units and the metrics are consistent.
• Shipping cost doesn't vary at scale in a way that kills the margin.
• There are no supplier availability issues at higher volumes.

Scaling a product with a negative margin just amplifies losses.

How to use the dropshipping profit simulator

Our dropshipping profit simulator is free, requires no sign-up and works directly in your browser. To use it:

1. Enter the selling price you charge customers.
2. Add the product cost you pay the supplier.
3. Enter the shipping cost to the customer (0 if shipping is free for them).
4. Enter the platform fee percentage (Shopify, Amazon, eBay…).
5. Optionally add the ad spend per sale and units per month.

The simulator updates results in real time as you type: profit per sale, net margin and monthly projection with a full cost breakdown.

Frequently asked questions

How much can you make with dropshipping per month?

It depends on volume and margin. With a 20% net margin and 100 sales per month at $25, you'd make around $500 per month. Dropshippers with mature stores and multiple products generate far more, but they also have more complex cost structures.

Is a high price with low volume better than low price with high volume?

Generally, mid-to-high ticket products ($20–$80) offer better absolute margin and are more resilient to rising CPAs. Very cheap products require enormous volumes to generate meaningful profit.

Should I use the price with or without tax in the simulator?

If you sell to end consumers and collect sales tax, and your selling price includes it, enter the price without tax so the simulator reflects your real pre-tax profit.