Dropshipping Margin Calculator
Find the profit and margin on a dropshipped product after deducting product cost, advertising cost and platform fees.
Recent
Formula
How the calculation works
The calculator subtracts the product cost, advertising cost and platform fees from the selling price to get profit.
It divides that profit by the selling price and multiplies by one hundred to show the margin as a percentage.
The break even price is found by adding the three costs together, which is the price below which a sale loses money.
Common mistakes
- Leaving out return and refund costs, since dropshipping often has a higher return rate that eats into profit.
- Setting advertising cost too low, because a realistic ad cost per sale is what decides whether the product is viable.
When to use it
- Dropshippers use it to check whether a product can absorb advertising cost before they start promoting it.
- It also shows the break even price so the seller knows the lowest amount that avoids a loss.
Worked example
Selling at 1200 taka with a product cost of 600 taka, ad cost of 200 taka and fees of 60 taka gives a profit of 340 taka and a margin of 28.33 percent, and the break even price is 860 taka.
Common questions
What is the break even price?
It is the selling price at which total costs equal revenue, so selling above it earns profit and selling below it results in a loss on each order.
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