What this calculator does
In dropshipping and print on demand, a supplier makes or ships each order, so most of the cost is the product, shipping, fees and ads. This calculator shows the profit each order makes before ads, the break-even ROAS and cost per order, your actual ROAS and cost per order, the ROAS you need for the margin you want and your profit per month and year after ad spend and store costs.
The formulas
Profit per order before ads = revenue − refunds − fees − product cost − shipping − other costs per order. Break-even ROAS = revenue per order ÷ profit before ads. Your ROAS = sales ÷ ad spend. Monthly profit = orders × profit before ads − ad spend − monthly store and app costs.
Example: a $35 product with a $14 print cost, $5 shipping, 3% + $0.30 in fees and 5% refunds makes $12.90 before ads, so the break-even ROAS is about 2.71. With $1,200 of ads bringing 100 orders (ROAS 2.92, $12 per order) and a $39 store plan, the month ends only $51 ahead. To keep a 15% margin you would need a ROAS of about 4.58.
What moves the numbers
- Price and product cost. A higher margin per order lowers the break-even ROAS, which makes ads much easier to run at a profit.
- Refunds. Refunded orders usually still cost you the product and shipping, so the refund rate hits profit twice.
- Fixed monthly costs. Store plans and apps need enough orders to cover them.
Rules to know
Under the FTC's mail, internet or telephone order rule you need a reasonable basis to ship when you say, or within 30 days if you give no time; if you cannot, you must tell the buyer, who may cancel for a prompt refund. Long supplier shipping times have to be stated honestly. Only sell designs and brand names you have the right to use. Profit is taxable business income.
Frequently asked questions
What is a good ROAS for dropshipping?
There is no single number. A good ROAS is one above your break-even ROAS, which depends on your margin. A product with $10 of profit before ads on a $40 sale breaks even at a ROAS of 4.
How do I calculate break-even ROAS?
Divide the revenue per order by the profit per order before ads. The thinner your margin, the higher the ROAS you need.
What is CPA?
Cost per acquisition, or cost per order: your ad spend divided by the orders it brought. Ads make money while your CPA is below the profit an order makes before ads.
Does this work for print on demand?
Yes. Enter the print provider's base price as the product cost and its shipping price as the shipping cost.