Calculate contribution margin for a dropshipping order after realistic variable costs.
A dropshipped desk lamp sells for $49. The supplier unit cost is $13.80. The store wants to know whether the product can afford a $17 target CPA. Contribution margin = selling price - all variable order costs The common trap is treating supplier cost as the only cost and calling the remaining spread profit. Revenue Start with the actual selling price: $49.00. Use the net price the customer usually pays, not the list price if discounts are common. Landed supplier cost Subtract supplier cost and shipping: $49.00 - $13.80 - $6.20 = $29.00. Dropshipping shipping is still your variable cost…
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