The Brutal Math of Shopify Dropshipping

Dropshipping via Shopify (sourcing from AliExpress, CJ Dropshipping, or AutoDS) is heavily marketed as a low-barrier business model. However, dropshipping relies entirely on paid traffic (Facebook/TikTok Ads), which means your margins are constantly under attack by rising Customer Acquisition Costs (CAC).

The Rule of Thirds

A standard benchmark for dropshipping profitability is the "Rule of Thirds." One third of your retail price goes to the product cost (COGS), one third goes to marketing (Ad Spend), and the final third is your gross profit (before Shopify subscription and payment gateway fees). If your product costs $15 to source and ship, you must sell it for at least $45 to have enough margin left over to acquire a customer profitably. Use this calculator to model your exact CPA thresholds.