Dropshipping ROAS Calculator

Include all costs: supplier/product cost, shipping from supplier to customer (often $2-8 for ePacket/AliExpress Standard), payment gateway fees (Stripe 2.9%+$0.30, PayPal 3.49%+$0.49), platform fees (Shopify 2% or subscription), packaging inserts if any, and estimated refund/chargeback losses (typically 2-5% for dropshipping).

Dropshipping has unique cost structures: higher per-unit product costs (no bulk discounts), longer shipping times leading to higher refund rates (5-15%), no control over packaging/quality, and often international shipping costs. These factors typically result in 20-40% margins compared to 40-60% for traditional e-commerce, requiring higher ROAS to profit.

Longer shipping times (15-30 days with AliExpress) increase refund requests and chargebacks. Customers may forget their purchase, request refunds, or file disputes. This can add 3-8% to your effective costs. Factor in a higher refund rate (8-15%) compared to fast-shipping businesses (2-5%) when calculating break-even ROAS.

AliExpress offers lower minimums but higher per-unit costs and 15-30 day shipping. Dropshipping agents (CJ Dropshipping, Wiio, Eprolo) offer faster shipping (7-15 days), slightly lower costs at volume, but may require minimums. Faster shipping = lower refund rates = lower break-even ROAS. Calculate both scenarios to decide.

Payment fees are percentage-based and add up: Stripe charges 2.9% + $0.30 per transaction, PayPal charges 3.49% + $0.49. For a $30 sale via Stripe, you pay $1.17 (3.9%). Include this in your cost calculation. Some Shopify payment methods have additional fees if not using Shopify Payments.

Realistic dropshipping margins range from 15-40% after all costs. Beginners often overestimate margins by forgetting shipping, payment fees, refunds, and ad costs. A product with 3x markup (cost $10, sell $30) has only 33% margin before payment fees and refunds. After all costs, real margin might be 20-25%.

Refunds cost you the product cost, shipping paid, and payment processing fees - plus you lose the sale. A 10% refund rate on a product with 30% margin effectively reduces your margin to 20%. Chargebacks are worse - you also pay $15-25 chargeback fees. High dispute rates (>1%) can get your payment account terminated.

Free shipping increases conversions but reduces margins significantly. If shipping costs $5 on a $25 product, free shipping cuts your margin by 20%. Calculate break-even ROAS both ways: with shipping included in product price (higher price, appears as free shipping) vs charging shipping separately. Test both approaches.

Recalculate monthly or when: supplier prices change, shipping rates change (common with AliExpress), your refund rate changes significantly, you switch payment processors, or currency exchange rates fluctuate. Dropshipping costs are more volatile than traditional retail, so monitor closely.