Ecommerce & Marketplaces
Break-even ad spend
The most you can pay for a sale and still break even.
The Formula
Break-even ad = Retail - Cost - Shipping - Platform - Payment
The most you can pay for a sale and still break even.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| R | Retail price | currency | What the customer pays. |
| C | Supplier cost | currency | What the supplier charges. |
| S | Shipping | currency | Shipping charged by the supplier. |
| P | Platform fee | currency | Marketplace or store commission. |
| F | Payment fee | currency | Processor percentage plus fixed fee. |
What Each Symbol Means
Rcurrency
Retail price
What the customer pays.
Ccurrency
Supplier cost
What the supplier charges.
Scurrency
Shipping
Shipping charged by the supplier.
Pcurrency
Platform fee
Marketplace or store commission.
Fcurrency
Payment fee
Processor percentage plus fixed fee.
See It Worked With Real Numbers
A formula on its own does not tell you which number goes where. The how to calculate dropshipping profit page applies this equation to a concrete case, shows every intermediate step, and names the mistakes that produce a wrong answer even when the algebra is right.
Where This Formula Appears
This equation is the working core of How To Calculate Dropshipping Profit, filed under Business. Every number the guide produces comes from substituting into this one line.