Dropshipping Margin Calculator
Gross, net, and the markup multiple behind them.
Net margin
28.1%
65.5% before advertising
The common rule is a 3× markup on landed supplier cost, and this is why — at 2.90× you have 65.5% gross to fund 33.8% of advertising plus processing, refunds and everything else.
How the Dropshipping Margin Calculator works
The 3× markup rule is not folklore — it falls out of the arithmetic. At 3× supplier cost you have roughly two thirds of the price as gross margin, which is what it takes to fund 30% to 40% advertising plus processing, refunds, apps and something left over.
Not financial advice. Marketplace fees change, and they vary by country, plan and seller status. Every rate here is an editable default, not a quoted price — check the platform's current fee schedule before you price a product against it. This is not tax or business advice.
Frequently asked questions
Why 3× and not 2×?
At 2× you have 50% gross. Advertising at 35% leaves 15% before processing, refunds and subscriptions — which in practice is nothing. At 3× the same advertising leaves roughly 30% to work with.
What is the difference between margin and markup?
Margin is profit as a share of the selling price; markup is the multiple over cost. A 3× markup is a 67% margin. Confusing the two is the fastest route to underpricing.
Can I dropship high-ticket items at a lower multiple?
Yes — a 1.5× markup on a £600 item leaves £200 of gross, plenty to fund acquisition. The multiple matters less than the absolute contribution per order relative to your cost per acquisition.
What if my supplier cost includes shipping?
Use the landed cost — supplier price plus their shipping — as the base for the multiple. Applying the markup to the item price alone overstates your margin by the shipping.