How to Price Dropshipping Products: Data From 221 Real Products
We analyzed markups on 221 real dropshipping products. The median is 4x cost, not the 2-3x every guide claims. See pricing data by category and price tier.
If you dropship from China to the US, the ground shifted under your feet today. A new 10% import surcharge under Section 122 took effect on February 24, 2026. The $800 de minimis exemption that let small packages enter duty-free is gone. And Section 301 tariffs of 7.5% to 25% on Chinese goods remain fully active.
Every other article on this topic gives you the same advice: "tariffs are bad, diversify your suppliers." None of them show you what actually happens to real product margins.
So we did the math. We took 221 dropshipping products from our curated database with real supplier costs, shipping fees, and sell prices, then modeled the impact of tariffs at 20%, 34%, and 54%. The results are more nuanced than the panic suggests.
The headline: 89% of products remain profitable even under the harshest tariff scenario. But certain categories and price points are getting crushed. Here is exactly what survived, what didn't, and how to pick tariff-proof products going forward.
Key Findings From 221 Products
| Metric | Pre-Tariff | At 20% Tariff | At 34% Tariff | At 54% Tariff |
|---|---|---|---|---|
| Profitable products | 210 / 221 | 207 / 221 | 205 / 221 | 197 / 221 |
| Survival rate | 95.0% | 93.7% | 92.8% | 89.1% |
| Median margin | 74.8% | 70.0% | 68.6% | 64.4% |
| Mean margin | 66.4% | 61.2% | 57.5% | 52.2% |
| 25th percentile margin | 56.7% | 48.5% | 43.4% | 35.9% |
Two things stand out. First, the survival rate holds up even at 54% because most dropshipping products have large markups. Second, the bottom quartile of products (below the 25th percentile) loses nearly 21 percentage points of margin. If your products were already running thin margins, tariffs can be the difference between profit and loss.
What Actually Changed: The 2025-2026 Tariff Timeline
The tariff situation has moved fast. Here is what matters for dropshippers, in chronological order:
February-March 2025: IEEPA tariffs on China. The administration imposed a 20% tariff on all Chinese imports under the International Emergency Economic Powers Act, citing fentanyl. This was on top of existing Section 301 duties.
May 2, 2025: De minimis ends for China. Packages under $800 from China no longer enter duty-free. Every single package now faces customs duties and processing. This was the biggest hit to traditional dropshipping, where individual orders ship directly from China to US customers.
August 29, 2025: De minimis ends globally. The exemption was suspended for all countries, not just China. The One Big Beautiful Bill Act signed in July 2025 makes the repeal permanent starting July 2027.
February 20, 2026: Supreme Court strikes down IEEPA tariffs. In Learning Resources v. Trump, the Court ruled 6-3 that the IEEPA does not authorize tariffs. Over $130 billion in collected IEEPA duties were voided.
February 24, 2026 (today): Section 122 surcharge takes effect. A 10% ad valorem duty on most imports, meant to replace the lost IEEPA revenue. This is temporary and expires July 24, 2026, unless Congress extends it.
Still active: Section 301 tariffs. Lists 1-3 impose 25% on roughly $250 billion of Chinese goods. List 4A adds 7.5% on approximately $120 billion of consumer products. List 4B (which covers laptops, phones, toys, and game consoles) remains suspended at 0%.
The net result: depending on what you sell, the effective tariff rate on Chinese goods ranges from around 10% to over 47%.
How Tariffs Stack on Dropshipping Products
This is where most articles mislead you. Tariffs are not a single flat rate. They stack.
A typical dropshipping product from China faces multiple layers:
| Tariff Layer | Rate | Applies To |
|---|---|---|
| MFN (baseline) | 3-5% average | All imports, varies by product classification |
| Section 301 (Lists 1-3) | 25% | ~$250B of Chinese goods |
| Section 301 (List 4A) | 7.5% | ~$120B of consumer goods |
| Section 301 (List 4B) | 0% (suspended) | Laptops, phones, toys, game consoles |
| Section 122 (new) | 10% | Most imports, expires Jul 24, 2026 |
The total depends on your product's HTS classification. A kitchen gadget on List 1 faces roughly 38-40% (3-5% MFN + 25% Section 301 + 10% Section 122). An LED strip light on List 4A pays about 22% (5% MFN + 7.5% Section 301 + 10% Section 122). A phone case on the suspended List 4B might only pay around 10% (Section 122 alone).
The three scenarios we modeled (20%, 34%, 54%) represent the realistic range from best case to worst case for most dropshipping categories.
221 Products, Three Tariff Scenarios: The Full Breakdown
We pulled every product from our database that had complete pricing data: supplier cost, shipping cost, and competitor sell price. That gave us 221 products across 30+ categories.
Every single one is manufactured in China. This is not a sampling bias. It reflects the reality of dropshipping in 2026: 100% of products in our curated catalog are China-sourced.
Margin Erosion by Tariff Rate
| Tariff Rate | Avg. Margin Points Lost | Median Margin Points Lost | Max Margin Points Lost |
|---|---|---|---|
| 20% | 5.3 points | 4.0 points | 28.0 points |
| 34% | 9.0 points | 6.8 points | 47.7 points |
| 54% | 14.2 points | 10.7 points | 75.7 points |
The average product loses about 5 percentage points of margin at a 20% tariff. That is manageable. But the worst-hit products lose up to 76 points at the highest rate. The products getting hammered share a common trait: their supplier cost is high relative to their sell price, leaving almost no room to absorb additional duties.
This is why evaluating products before you commit matters more than ever. A product that looked profitable at 40% margins might go underwater once tariffs eat 10-15 points.
Category Winners and Losers Under Tariffs
Not all product categories respond the same way. We grouped all 221 products by their primary category and calculated survival rates at the 54% tariff level (worst case).
Categories That Survive (100% profitable at 54% tariff)
| Category | Products | Avg. Margin Before | Avg. Margin After 54% | Survival Rate |
|---|---|---|---|---|
| Beauty | 13 | 78.4% | 68.9% | 100% |
| Electronics | 6 | 73.6% | 60.9% | 100% |
| Toys | 6 | 74.6% | 64.2% | 100% |
| Fashion | 8 | 73.9% | 62.4% | 87.5% |
Beauty products are the clear tariff winners. Their supplier costs average just $6.34 against an average sell price of $43.88. The markup is large enough that even a 54% tariff on the cost barely dents the margin. A face slimmer lip trainer that costs $0.87 to source still holds a 99.9% margin after any tariff scenario.
Electronics also fare well because many consumer electronics fall under the suspended List 4B (0% Section 301), meaning they only face the 10% Section 122 surcharge. Products like the Fire TV remote replacement, which costs $0.87 and sells for $39, maintain a 96.6% margin even at 54%.
Categories Getting Squeezed
| Category | Products | Avg. Margin Before | Avg. Margin After 54% | Survival Rate |
|---|---|---|---|---|
| Home & Kitchen | 5 | 38.9% | 24.9% | 60% |
| Pets | 4 | 47.6% | 30.2% | 50% |
| Health & Wellness | 6 | 46.2% | 18.4% | 66.7% |
| Automotive | 8 | 57.8% | 42.4% | 75% |
Health and wellness products are the most vulnerable. They start with lower margins (46.2% average) and their higher supplier costs amplify the tariff impact. Two out of six health products in our database go negative even at the lowest 20% tariff rate.
The pattern is clear: categories with low source costs and high perceived value (beauty, accessories, fitness gadgets) weather tariffs well. Categories where the product itself costs more to manufacture (health devices, kitchen organizers, automotive parts) face the tightest squeeze.
The Middle Ground
Technology (46 products, the largest category) and Home & Garden (40 products) both survive at above 93% rates. Technology products average $25.12 in supplier cost against $142.05 in sell price, giving them a 15 percentage-point margin cushion after even the worst tariff. Home and garden products show similar resilience at 97.5% survival, losing about 15 points of margin but staying solidly profitable.
Price Tier Analysis: Which Price Points Survive
We split all 221 products into four sell-price tiers. The results counter a common assumption.
| Price Tier | Products | Current Margin | Margin After 54% | Survival Rate |
|---|---|---|---|---|
| Under $25 | 63 | 66.8% | 52.9% | 87.3% |
| $25-50 | 78 | 65.8% | 51.4% | 88.5% |
| $50-100 | 47 | 61.6% | 45.3% | 91.5% |
| $100+ | 33 | 74.1% | 62.7% | 90.9% |
Products priced above $100 are the most tariff-resilient, maintaining 62.7% margins even at 54% duties. This might seem counterintuitive, since higher-priced products often have higher absolute supplier costs. But the markup ratio matters more than the absolute cost. A product that costs $56 and sells for $439 (the average $100+ product in our data) absorbs a 54% tariff on that $56 cost and still keeps $353 in margin.
The under-$25 tier has the lowest survival rate (87.3%). These products run tighter margins because there is a floor on shipping costs and supplier minimums that compresses percentages at lower price points. When tariffs add another $1-2 per unit, it can tip borderline products into the red.
For a more detailed look at how pricing strategy affects profitability, see our Shopify profit margin guide.
Products That Survive Any Tariff
These 10 products maintain profitability even at the harshest 54% tariff rate. They share a pattern: ultra-low supplier costs with high perceived value.
| Product | Category | Cost | Sell Price | Margin After 54% |
|---|---|---|---|---|
| Comfort Arch Support Insoles | Sports | $1.32 | $149.00 | 98.6% |
| Stove Protector Mat | Kitchen | $0.99 | $109.99 | 98.6% |
| AI Translation Earbuds | Technology | $2.98 | $203.99 | 98.3% |
| Smart Posture Corrector | Health | $0.99 | $54.00 | 97.2% |
| Car Seat Covers | Automotive | $6.48 | $309.00 | 97.1% |
| Fire TV Remote Replacement | Electronics | $0.87 | $39.00 | 96.6% |
| Car Wiper Blade Restorer | Automotive | $0.87 | $37.87 | 96.5% |
| Boxing Machine Trainer | Sports | $2.98 | $99.00 | 96.5% |
The supplier cost for every product on this list is under $7. At 54% tariff, the maximum additional duty on any of these is $3.50. When your sell price is $39 to $309, absorbing $3.50 in duties is trivial.
This is the tariff-proof formula: source cheap, price with value. Products that solve a specific problem (posture correction, stove protection, translation) or create perceived premium value (boxing trainer, car seat covers) command high prices regardless of their material cost.
For more products with these margins, browse our full product directory or see the 100 best dropshipping products for 2026.
Products That Don't Make It
On the other end, these products go negative at even moderate tariff rates. Most were already unprofitable or barely breaking even before tariffs entered the picture.
| Product | Category | Cost + Shipping | Sell Price | Current Margin | Margin After 20% |
|---|---|---|---|---|---|
| Home Blood Pressure Monitor | Health | $52.69 | $37.58 | -40.2% | -68.3% |
| Bamboo Cabinet Organizer | Home & Kitchen | $43.32 | $27.99 | -54.8% | -65.0% |
| Earwax Removal Kit | Health | $50.11 | $54.99 | 8.9% | -8.6% |
| Bright Fire Torch Lighter | Home & Garden | $11.01 | $11.45 | 3.8% | -15.4% |
The vulnerable products share the opposite pattern from the survivors: their supplier cost (plus shipping) eats most or all of the sell price, leaving zero room for tariffs. The blood pressure monitor costs $52.69 to source but only sells for $37.58. It was already a money-loser before tariffs.
The lesson: if your current margins are below 30%, any tariff increase can make the product unviable. Products in the 30-50% margin range need careful monitoring. Products above 50% can absorb most realistic tariff scenarios.
What About De Minimis? The Hidden Cost Nobody Talks About
The tariff rate gets the headlines, but the death of de minimis might be the bigger hit to traditional dropshipping.
Before May 2025, every package under $800 entered the US duty-free. This was the backbone of the AliExpress/CJ Dropshipping model: your customer orders a $25 item, it ships directly from a Chinese warehouse, clears customs automatically, no duties collected.
That is over. Now every package faces:
- Customs duties at whatever stacked rate applies to the product
- Customs processing fees (brokers charge $5-25 per entry for small parcels)
- Potential delays for inspection and classification
The volume impact has been dramatic. According to CBP data, de minimis packages dropped from roughly 4 million per day to 600,000 per day after enforcement began. That is an 85% decline in duty-free small parcel imports.
For dropshippers shipping individual orders from China, this means adding $2-10 per order in brokerage and duty costs. On a $20 product, that can eat your entire margin. On a $100+ product, it is a rounding error.
This is another argument for selling higher-priced products and working with suppliers who handle DDP (Delivered Duty Paid) shipping, where duties are baked into the supplier price upfront.
5 Strategies That Work Post-Tariff
Based on what our data shows, here is what actually moves the needle:
1. Prioritize High-Margin Categories
Our analysis shows beauty, technology, and sports products survive tariffs at the highest rates. These categories share a common trait: low raw material costs with high perceived value. When tariffs add 20-54% to a $1-5 supplier cost, the absolute dollar impact is minimal.
If you are starting fresh, filter for categories where average source costs stay under $10 and sell prices exceed $30. That gives you the markup buffer to absorb duties and still hit target margins above 50%.
2. Build Tariffs Into Your Product Evaluation
Before tariffs, you could evaluate a product with simple math: sell price minus cost minus shipping equals profit. Now you need a fourth variable.
Add a "tariff buffer" step to your product evaluation process. Multiply the supplier cost by 1.35 (a conservative 35% effective rate) before calculating margins. If the product is still profitable at that adjusted cost, it will survive most tariff scenarios. If it only works at the base cost, skip it.
3. Negotiate DDP Shipping Terms
DDP (Delivered Duty Paid) means the supplier handles customs clearance and pays duties before the package reaches your customer. This eliminates surprise costs and customer-facing customs fees, which can tank your reviews.
Many established suppliers on AliExpress and through agents like CJ Dropshipping now offer DDP options to the US. The per-unit cost is higher, but you know your exact landed cost upfront. Our supplier guide covers how to vet suppliers for DDP capability.
4. Watch the Section 122 Expiration
The 10% Section 122 surcharge expires on July 24, 2026, unless Congress acts to extend it. If it lapses, the effective tariff rate on many products drops by 10 percentage points overnight. Products that are borderline profitable today could become solidly profitable in five months.
Stay informed. The Supreme Court's IEEPA ruling already created one sudden shift in February. Tariff policy in 2026 is not static.
5. Consider US-Based Fulfillment
If you are selling enough volume, working with a US-based 3PL (third-party logistics provider) changes the tariff math. Instead of paying duties on every individual package, you import in bulk with a single customs entry and distribute domestically. The per-unit duty is the same, but you eliminate per-package brokerage fees ($5-25 each) and reduce shipping times from 14+ days to 2-5 days.
This only makes sense once you are moving consistent volume. For beginners testing products, the direct-from-China model still works if you choose high-margin products that absorb duties comfortably.
The Bigger Picture: Is Dropshipping Still Viable With Tariffs?
Yes. Our data is clear on this point.
Even under the harshest tariff scenario we modeled (54%), 89% of products stay profitable. The median margin drops from 74.8% to 64.4%, which is still a strong margin by any standard. Compare that to the average income data we analyzed across 219 products: most successful dropshippers target 40-60% margins as healthy.
The products that fail under tariffs were mostly failing before tariffs. Of the 24 products that go unprofitable at 54%, 11 were already in the red with zero tariffs. Tariffs are not killing profitable dropshipping products. They are exposing products that were never properly evaluated in the first place.
The bigger threat is not tariff rates. It is the operational friction: customs delays, brokerage fees, customer confusion about unexpected duties. One CNBC-profiled dropshipper reported a 33% revenue decrease after the initial tariff wave. But those problems are solvable with the right supplier relationships and fulfillment setup.
For a broader analysis of whether the model still works, see our data-driven answer to "is dropshipping dead?".
Tariff Impact Calculator: Quick Reference
Use this reference to estimate the tariff impact on any product you are evaluating:
| Your Supplier Cost | Tariff at 20% | Tariff at 35% | Tariff at 50% |
|---|---|---|---|
| $1 | +$0.20 | +$0.35 | +$0.50 |
| $5 | +$1.00 | +$1.75 | +$2.50 |
| $10 | +$2.00 | +$3.50 | +$5.00 |
| $25 | +$5.00 | +$8.75 | +$12.50 |
| $50 | +$10.00 | +$17.50 | +$25.00 |
| $100 | +$20.00 | +$35.00 | +$50.00 |
Remember: tariffs apply to the declared product cost only, not shipping. Add the tariff amount to your cost basis, then recalculate your margin using your sell price. If you need help with the margin math, our profit margin calculator walks through the formulas.
Do dropshippers have to pay tariffs in 2026?
Yes. With the de minimis exemption eliminated, every package entering the US faces customs duties. This applies whether you ship directly from China to customers or import through a US warehouse. The days of duty-free small parcels are over.
What is the current tariff rate on Chinese dropshipping products?
It varies by product. The effective rate ranges from about 10% (for items on the suspended Section 301 List 4B, like phones and toys) to over 47% (for textiles and goods on Section 301 Lists 1-3). Most typical dropshipping products face 20-35% in stacked tariffs as of February 2026.
Who pays the tariff, the seller or the customer?
The importer of record pays the tariff. In direct-from-China dropshipping, that is typically the customer (if using DDU shipping) or the supplier (if using DDP shipping). With DDP, the supplier bundles duties into the product cost, so you know your landed cost upfront. DDU can lead to surprise customs bills for customers.
Can I avoid tariffs on dropshipping products?
No legal way exists to completely avoid tariffs on Chinese imports. However, you can minimize the impact by choosing products with low supplier costs and high margins, working with DDP suppliers, or sourcing from non-China countries that face lower tariff rates. Some product categories (List 4B items) still have 0% Section 301 rates.
Is dropshipping from China still profitable with tariffs?
Yes, for the right products. Our analysis of 221 real products shows 89% remain profitable even at a 54% effective tariff rate. The key is product selection: choose items with supplier costs under $10 and sell prices above $30 to maintain a margin buffer that absorbs duties comfortably.
What happened to the $800 de minimis exemption?
The $800 de minimis exemption was suspended for Chinese shipments on May 2, 2025, and for all countries on August 29, 2025. The One Big Beautiful Bill Act permanently repeals it starting July 2027. Every package now faces customs duties and processing fees regardless of value.
Will tariffs on China go down in 2026?
The 10% Section 122 surcharge expires July 24, 2026, which would reduce effective rates by 10 percentage points. Section 301 tariffs remain active indefinitely. The Supreme Court struck down IEEPA tariffs in February 2026, which already removed a significant tariff layer. The situation remains fluid.
Which dropshipping categories are most affected by tariffs?
Health and wellness products are the most vulnerable, with only 66.7% surviving at a 54% tariff rate in our analysis. Home and kitchen products (60% survival) and pets (50% survival) also struggle. Beauty products are the most resilient at 100% survival, followed by electronics and toys.
How do I find the tariff rate for my specific product?
Look up your product's HTS (Harmonized Tariff Schedule) code using the US International Trade Commission's search tool at hts.usitc.gov. The HTS code determines your baseline MFN duty rate and which Section 301 list your product falls under. Add the 10% Section 122 surcharge to get your current total effective rate.
Where This Leaves Dropshippers
Tariffs changed the math, not the model. The fundamentals of dropshipping still work: find products with strong demand, healthy margins, and good marketing angles. What changed is the minimum margin threshold for viability.
Before tariffs, a product with a 30% margin could work. Now, 30% is the danger zone. Our data suggests targeting products with at least 50% pre-tariff margins to maintain a comfortable buffer. The biggest mistakes dropshippers make often come down to thin margins, and tariffs make that mistake more expensive.
The good news: the majority of well-chosen products still work. Focus on categories that proved resilient in our analysis, validate margins with tariff costs built in, and treat duty calculations as a standard part of product research. The dropshippers who adapt their evaluation process will find that tariffs thin out competition more than they thin out profits.
You can browse tariff-resilient products with real margin data on ProductLair.
