If your store is not printing predictable contribution margin per order, nothing else matters. The fastest way to change that is to nail your pricing math, set shipping policies that protect margin, and know exactly what ROAS you must hit to break even and to bank real profit. This guide gives you the simple, durable equations and plays that beginners and busy operators can use today on Shopify or WooCommerce, with practical shortcuts using WooDropship.

Start with first principles: what really sits inside your per-order gross margin

Gross margin for a dropshipped order is not just price minus cost of goods. It is price minus all variable costs that scale with an order. Align your definitions with standard ecommerce terms by reviewing the WooDropship wiki for cost of goods sold, payment processing fees, shipping fees, and shipping cost optimization.

At the order level, define these variables:

• P: product selling price
• C: supplier product cost from AliExpress
• Ssup: shipping you pay to the supplier
• Scust: shipping you charge the customer
• Fp% and Ffix: payment processing percent and fixed fee
• R%: refunds and chargeback allowance (optional, conservative operators budget 1 to 3 percent of revenue; see WooDropship wiki on chargebacks)

Contribution margin before ads, as a percent of revenue, is your true Pre-Ads Margin%:

Pre-Ads Margin% = [P + Scust − (C + Ssup) − (Fp% × P) − Ffix − (R% × P)] ÷ P

Two real-world payment fee anchors help you model Fp and Ffix. Stripe’s US pricing shows 2.9 percent plus 0.30 per online card transaction for domestic cards, while PayPal’s business fees list 3.49 percent plus a fixed fee for PayPal Checkout and 2.99 percent plus a fixed fee for standard credit and debit card processing. Factor your store’s actual mix and use a blended rate in modeling.

Breakeven ROAS, then the ROAS you need to bank 30 to 50 percent gross margins

Return on ad spend is defined by Google as revenue per ad dollar. The Google Ads help page on Target ROAS explains that a 500 percent ROAS means 5 dollars in sales for every 1 dollar in ad spend. That definition is your baseline for the math.

Once you know your Pre-Ads Margin%, breakeven ROAS is simple:

• Breakeven ROAS = 1 ÷ Pre-Ads Margin%

Example 1, single SKU:

• P = 24.99, C = 6.00, Ssup = 2.50, Scust = 0.00 free shipping
• Stripe-like fees: Fp% = 2.9 percent, Ffix = 0.30
• R% = 2 percent

Contribution dollars before ads = 24.99 − 6.00 − 2.50 − 0.724 − 0.30 − 0.50 ≈ 14.95

Pre-Ads Margin% = 14.95 ÷ 24.99 ≈ 59.8 percent, so Breakeven ROAS ≈ 1 ÷ 0.598 ≈ 1.67.

This tells you any paid channel ROAS over 1.67 keeps you above water. But you likely want 30 to 50 percent gross margins after ads. Solve for the ad cost you can afford to keep a target after-ads margin, then convert that to ROAS:

• Allowed Ad Cost% = Pre-Ads Margin% − Target After-Ads Margin%
• Required ROAS to hit target = 1 ÷ Allowed Ad Cost%

Continuing the example, if you want 35 percent after-ads margin:

• Allowed Ad Cost% = 59.8 percent − 35 percent = 24.8 percent
• Required ROAS ≈ 1 ÷ 0.248 ≈ 4.03

So with those inputs, you need roughly 4.0 ROAS to finish at 35 percent margin. If you target 30 percent after-ads margin, your allowed ad cost rises to 29.8 percent and the required ROAS drops to about 3.36. These numbers line up with the industry rule that for high-margin brands, 3.0x ROAS is often breakeven, as summarized by Conjura’s eCommerce ROAS guide.

You can bookmark the concept on our wiki for return on ad spend and reuse it SKU by SKU. If you run bundles and volume discounts, recalc Pre-Ads Margin% at the order level since bundle pricing changes both the revenue and the fee impact of the fixed 0.30.

Pricing plays that keep you inside your ROAS window

1. Anchor margin first, then the market. Start with the margin you need, calculate the floor price that protects Pre-Ads Margin%, and only then survey competitors to see if your value prop and offer can clear that price. Our article on pricing strategy to boost AOV walks through practical tiers and rounding.

2. Use psychological pricing and rounding rules in bulk. With the WooDropship dropshipping plugin, set global markups, rounding, and compare-at pricing so new imports from AliExpress land with clean 19.99 or 24.95 endings. The plugin’s AI title and description optimizer also helps you rank better for search without extra tools, while the Chrome extension syncs costs and variants.

3. Turn fixed fees into a rounding buffer. Because card fees include a fixed component, low-ticket items get hit harder. Nudging price up by 1 dollar can cover the per-order fixed fee and protect Pre-Ads Margin% meaningfully on 10 to 25 dollar SKUs.

4. Bundle to raise average order value. The Shopify AOV guide notes that personalized recommendations and bundles can significantly increase AOV. Higher AOV makes fixed fees and packing costs a smaller percentage of revenue. WooDropship’s prebuilt Shopify stores ship with bundle widgets ready so you can add “starter kit” and “buy 2 get 1” without hunting apps.

If you want a store delivered in 7 days, see WooDropship prebuilt Shopify stores. If you prefer owning your stack, install the WooDropship WooCommerce plugin once with a single 89 dollar lifetime license, no recurring charge.

Shipping strategy that defends margin without tanking conversion

Your shipping choice determines Ssup, Scust, delivery time, and customer expectations. For China origin, three practical lanes dominate for AliExpress sellers:

• AliExpress Standard Shipping. The AliExpress blog’s 2025 update says Standard typically runs about 15 to 45 business days, while Premium runs roughly 12 to 15 days, often 7 to 15 days to the US, with higher cost for speed. See AliExpress’s own guidance in their article on how long AliExpress takes to ship in 2025.
• ePacket equivalencies. Shopify’s 2025 breakdown of ePacket and alternatives states that AliExpress Standard Shipping is a tracked, mid-priced option with a 10 to 45 day window, while ePacket shipments to the US are often 7 to 15 working days. Use the comparison in Shopify’s ePacket guide to set expectations on product pages.
• Express upgrades for impatient buyers. Offer paid DHL or Premium upgrades as checkout upsells. Pass through most of the cost while framing the value in days saved.

Use one of these three store-level policies:

• Free shipping threshold. Set Scust = 0 above a threshold just above your modal order value. The Shopify AOV guide recommends thresholds roughly 30 percent higher than your most common order size so most customers find it reachable without crushing your Pre-Ads Margin%.
• Flat rate shipping that tracks your Ssup average. See the WooDropship wiki on flat rate shipping and shipping cost optimization. This model helps you cover packaging and occasional overweight shipments while keeping the offer simple.
• Mixed model. Free economy shipping, paid expedited shipping. This protects margin for value buyers and lets impatient buyers self-select into a higher Scust that subsidizes Ssup.

For a deeper AliExpress-specific breakdown, read our shipping playbooks on AliExpress Standard, Cainiao, and ePacket and ePacket alternatives.

Worked example: bundles plus shipping threshold to unlock a 3.2 target ROAS

Assume you sell a 14.99 item with C = 3.80 and Ssup = 2.20. At that price, Ffix and R% eat your lunch. Instead, run a “buy 2 get free shipping” bundle to nudge AOV into 29.98 and set a free shipping threshold at 28.00.

• New effective P = 29.98, C = 7.60, Ssup = 4.40, Scust = 0
• Fees at Stripe-like rate: Fp% = 2.9 percent, Ffix = 0.30, R% = 2 percent

Contribution dollars = 29.98 − 7.60 − 4.40 − 0.869 − 0.30 − 0.60 ≈ 16.15

Pre-Ads Margin% ≈ 16.15 ÷ 29.98 ≈ 53.9 percent, Breakeven ROAS ≈ 1.85.

If you aim for a 25 percent after-ads margin, Allowed Ad Cost% = 53.9 percent − 25 percent = 28.9 percent, so Required ROAS ≈ 3.46. That target is realistic on optimized Meta or Google shopping traffic if your funnel is clean and your creatives convert. Keep ROAS definitions straight using Google’s description of what ROAS represents in Target ROAS bidding.

To protect conversion while you tune offers, fix basic friction. Baymard tracks the global average cart abandonment at about 70 percent, so removing checkout hurdles matters. See Baymard’s 2025 list of cart abandonment statistics and apply the quick wins.

Shopify or WooCommerce, the math is the same, but the setup speed differs

On Shopify, you can launch fast and keep your stack lean. If you are starting from scratch, begin with a Shopify free trial, add your theme, then drop in WooDropship’s prebuilt store so you get 30 vetted products, a premium theme, legal pages, PayPal and Stripe setup, and conversion features like bundles, countdown timers, and bought-together sections. See the deliverables and 7 day turnaround on our dropshipping stores. If you have questions, our team is a message away on the contact page.

On WooCommerce, your advantage is total control and near-zero app fees. Install the WooDropship plugin for a one-time 89 dollar lifetime license, import AliExpress products in one click, push AI-optimized titles and descriptions, and sync orders with our Chrome extension. The plugin’s bulk pricing rules, rounding, and compare-at logic save hours when you test price points.

If you plan to sell cross-border, review the WooDropship wiki on import duties and taxes and tariffs and customs. For payments, pair Stripe and PayPal so buyers see their preferred wallet at checkout.

The two templates you need to keep by your desk

• Breakeven ROAS template. For each hero SKU and bundle: calculate Pre-Ads Margin% using your current P, C, Ssup, Scust, Fp, Ffix, and R%. Then, Breakeven ROAS = 1 ÷ Pre-Ads Margin%. Print it next to the campaign name in your ad account so every buyer and media buyer sees the line in the sand.
• Profit-target ROAS template. Decide a target after-ads margin per product tier, usually 25 to 40 percent for impulse-priced items and 35 to 50 percent for higher-ticket products. Compute Allowed Ad Cost% = Pre-Ads Margin% − Target After-Ads Margin%, then Required ROAS = 1 ÷ Allowed Ad Cost%. This is your scale threshold.

Rapid checklist to protect margin this week

• Reprice 5 top SKUs with rounding that covers fixed fees; set bundle offers that push AOV above your free shipping threshold.
• Switch your default shipping to AliExpress Standard with a clear delivery window, and add a paid express upgrade. Cite the delivery windows using Shopify’s ePacket comparison and AliExpress’s 2025 shipping timings on your product pages.
• Set your breakeven and profit-target ROAS inside campaigns. The Google Ads Target ROAS article shows how to interpret ROAS percentages correctly.
• Enable bundles, bought together, and cart goals. Shopify confirms bundles can materially lift AOV in its AOV playbook. Your WooDropship Shopify store includes these features out of the box.
• Track results for 7 to 14 days, then tune prices and thresholds in your WooDropship plugin bulk rules or via your Shopify product editor. Use our wiki on conversion optimization to find the lowest-effort wins.

If you need a head start, pick a niche template and let us deliver your store in a week at a one-time 49 dollar fee via WooDropship’s prebuilt Shopify stores. Your policies and compliance links are already scaffolded, and you can always review our legal hub, privacy policy, and terms of service for clarity.

Happy WooDropshipping!