Question 1

How do I calculate profit margin on Shopify?

Accepted Answer

Subtract your total costs — product cost, shipping and ad spend per unit — from your selling price to get profit per unit. Divide that by the selling price for margin %. This free calculator does it instantly, including your break-even point.

Question 2

What is a good profit margin for dropshipping?

Accepted Answer

Many dropshippers target 20–40% net margin after ad spend, but it varies by niche and price point. Higher-ticket products can sustain lower percentages; cheap products need higher margins to survive returns and ad costs.

Question 3

What is break-even in ecommerce?

Accepted Answer

Break-even is the point where revenue exactly covers costs — you neither profit nor lose. Knowing your break-even per unit tells you the minimum price and the maximum ad cost you can absorb before a sale stops being profitable.

Question 4

Should I include ad spend in profit margin?

Accepted Answer

Yes. Ad spend is a real cost of acquiring each sale, so true profit must subtract it. Calculating margin before ads flatters your numbers and is how many sellers think they're profitable when they're not.

Shopify Profit Margin Calculator

Profit calculator — FAQ

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