Dropshipping Profit Margin Calculator | Analyze Your Ecommerce Business

Let’s say you’re selling a T-shirt online.

• Product cost: $8
  
• Shipping cost: $4
  
• Selling price: $25
  
• Transaction fee: 3%
  
• Tax rate: 5%
  
• Advertising cost: $5
  

You might think you’re making $17 profit per sale ($25 – $8), but once shipping, fees, ads, and taxes are factored in, your real profit is much smaller.

That’s why this calculator exists — to show you the true profit margin, not just the guesswork.

What Is This Calculator?

The Dropshipping Profit Margin Calculator is a tool designed for ecommerce sellers who want to quickly check:

• How much money they really make per sale.
  
• The effect of shipping, transaction fees, ads, and taxes.
  
• Their net profit margin (percentage) — which is what investors and smart sellers track.
  

Why Is It Important?

Running a dropshipping store isn’t only about selling products. It’s about managing margins. Even if sales are high, poor margins can leave you with little to no profit.

This calculator is important because it:

• Prevents overestimating profits.
  
• Helps set the right product price.
  
• Shows how ads and fees impact your earnings.
  
• Supports smarter scaling and reinvestment decisions.

Formula

The calculator works step by step like this:

1. Total Cost = Product Cost + Shipping Cost + Advertising Cost
   
2. Fees & Taxes = (Selling Price × Transaction Fee %) + (Selling Price × Tax Rate %)
   
3. Gross Profit = Selling Price – Total Cost
   
4. Net Profit = Gross Profit – Fees & Taxes
   
5. Profit Margin (%) = (Net Profit ÷ Selling Price) × 100
   

Step-by-Step: How the Calculator Works

1. Enter Product Cost ($): The amount you pay your supplier per item.
   
2. Enter Shipping Cost ($): What it costs to deliver each order.
   
3. Enter Selling Price ($): What you charge the customer.
   
4. Transaction Fee (%): Marketplaces (like Shopify, PayPal, Amazon) usually take 2–5%.
   
5. Tax Rate (%): Depending on your region, this could be 5–20%+.
   
6. Advertising Cost ($): The average cost to acquire one customer (Facebook ads, Google ads, etc.).
   
7. Press Calculate.
   
8. Instantly, you’ll see:
   
   • Total Costs (all combined).
     
   • Fees & Taxes.
     
   • Gross Profit.
     
   • Net Profit (what really goes in your pocket).
     

Profit Margin % (key number to track).