What’s A Good Dropshipping Profit Margin (And How to Improve It)
- A gross profit margin of 30-40% is considered favorable for most dropshippers.
- A net profit margin of around 15-20% is a strong benchmark.
- Gross Profit = Total Revenue - COGS
- Gross Profit Margin = (Gross Profit ÷ Revenue) × 100%
- Gross Profit = $50,000 - $20,000 = $30,000
- Gross Profit Margin = ($30,000 ÷ $50,000) × 100% = 60%
- Net Profit = Total Revenue - COGS - Other Expenses
- Net Profit Margin = (Net Profit ÷ Revenue) × 100%
- Net Profit = $50,000 - $30,000 - $10,000 = $10,000
- Net Profit Margin = ($10,000 ÷ $50,000) × 100% = 20%
Irene Le
Content Manager at TrueProfit & eCommerce Marketing Specialist
Irene Le is the Content Manager at TrueProfit, specializing in crafting insightful, data-driven content to help eCommerce merchants scale profitably. With over 5 years of experience in content creation and growth strategy for the eCommerce industry, she is dedicated to producing high-value, actionable content that empowers merchants to make informed financial decisions.
