Skip to content
Businessecommerce

Dropshipping Profit Calculator

Dropshipping unit economics with advertising and refunds. Advertising cost per sale is the input that decides everything, and it is the one that rises as you scale.

Also called: dropship margin calculator, ecommerce unit economics.

₹
₹
₹
₹
%
%
Profit per order
₹58

₹58 per order at a 3.84% net margin, or ₹17,282 a month on 300 orders. Advertising is 28.02% of the price, which is usually the input that decides whether this works.

Net margin
3.84%
Monthly profit
₹17,282
Total cost per order
₹1,257
Advertising as a share of price
28.02%
Break-even ROAS
2.27
Most you can spend on ads per order
₹478
How this is calculated
Method and background

How this is calculated

Supplier cost, shipping, payment fees and advertising all come off the price, and refunds remove revenue without returning the costs already incurred. The break-even ROAS shown is one over the contribution margin before advertising, which is the number to hold ad campaigns against. The structural difficulty is that ad cost per sale rises as spend increases, so a model that works at three hundred orders may not at three thousand.

refunds scale with the price while product and shipping costs do not come back
P
Selling price
r
Refund rate

Worked examples

Each of these is asserted on every build. If a change to the engine ever moved one of these answers, the build would fail before the page could print it.

a typical listing

Selling price
₹1,499
Supplier cost
₹620
Shipping
₹180
Advertising per sale
₹420
Payment processing
2.5%
Refund and dispute rate
8%
Orders a month
300

Profit per order₹58

620 + 180 + 420 + 37.48

Open this example

no advertising leaves the full contribution

Selling price
₹1,499
Supplier cost
₹620
Shipping
₹180
Advertising per sale
₹0
Payment processing
2.5%
Refund and dispute rate
0%
Orders a month
300

Profit per order₹662

boundary

Open this example

Method and limits

What it assumes

  • A single product with a stable supplier price.

What it deliberately does not model

  • Customer acquisition cost rises with scale, which a flat per-order figure hides.
  • Long shipping times drive disputes, and the dispute rate here is an input rather than a prediction.

Formula version 1.0.0 · definition 1.0.0 · India · Report a problem with this calculator

Frequently asked questions

What margin does dropshipping need?
Enough that advertising fits inside it. If product and shipping take sixty percent of the price, everything else must live in the remaining forty, and paid acquisition rarely does.