Join DiscordToolkit

📈 Profit Margin Calculator

Enter your product cost and selling price to see your gross profit margin, markup, and profit per order. Margin is the first number that decides whether a product can survive paid ads.

$0$500
$0$200
Gross Margin
71.4%
65%+ is healthy for paid ads
Gross Profit / Order
$35.00
Total Variable Costs
$14.00
Markup
250.0%
Healthy margin — enough cushion to run paid ads profitably and absorb occasional refunds.
Formula:Gross Margin % = (Selling Price − All Costs) ÷ Selling Price × 100
Industry Benchmarks
Excellent (65%+)65% – 85%
Workable (40–65%)40% – 65%
Tight (under 40%)Below 40%
Recommended next step

How to use this tool

  1. Enter your product cost. Type your total landed cost — what you pay the supplier for the product plus shipping.
  2. Enter your selling price. Type the price the customer pays at checkout.
  3. Read your margin. The calculator shows your gross margin %, markup %, and profit per order in real time.

Profit Margin Calculator — explained

Gross profit margin is profit divided by selling price: (Price − Cost) ÷ Price. It tells you what share of every sale you actually keep before ad spend, fees, and refunds.

For paid-traffic dropshipping, operators target roughly 65%+ gross margin. That cushion is what lets a product stay profitable at a 2–3× break-even ROAS once Meta takes its cut. Thin margins (under 40%) leave almost no room for ad inefficiency — one bad day of testing wipes out the week.

Margin and markup are not the same number. A 70% margin is a 233% markup. The calculator shows both so you can talk to suppliers in markup terms and to yourself in margin terms.

Use this in context

Profit Margin Calculator — common questions

How do you calculate profit margin?
Profit margin = (Selling Price − Cost) ÷ Selling Price, expressed as a percentage. If you sell for $50 and it costs you $15, your margin is (50 − 15) ÷ 50 = 70%.
What is a good profit margin for dropshipping?
Most operators aim for 65%+ gross margin on paid-traffic products. That leaves enough room to cover a 2–3× break-even ROAS, payment fees, and the occasional refund while staying profitable.
What's the difference between margin and markup?
Margin is profit as a percentage of the selling price; markup is profit as a percentage of cost. A product that costs $15 and sells for $50 has a 70% margin but a 233% markup.
Does this include ad costs?
No — this is gross margin, before advertising. To see profit after ads, use the Dropshipping Profit Calculator, which subtracts your cost per acquisition too.
Original content by First Sale Society — . Free, no paywall.