Free tool
Break-even calculator
How many sales before the business stops losing money? Enter your monthly fixed costs, your price, and what each unit costs you to sell.
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- Units and revenue
Break-even point
0 units
Break-even formula
Break-even units = fixed costs divided by (price minus variable cost per unit). Break-even revenue is that number of units times the price.
Example: $3,000 a month in fixed costs, a $50 product that costs $20 to make and ship. Each sale contributes $30 toward fixed costs, so you need 100 sales, $5,000 in revenue, to break even. Every sale after that is $30 of profit.
Fixed costs a new online business forgets
Platform plans (Shopify, Amazon Professional), apps and software, a registered agent, bookkeeping and tax filing, a virtual address and phone line, domain and email. They are small one by one and add up to several hundred dollars a month. The LLC cost calculator lists the company-side ones; the Shopify and FBA calculators give the platform side.
Know your fixed costs before you launch
Formation is $399 with all state fees included, and you can see every recurring compliance cost up front in our LLC cost calculator.
Frequently asked questions
How do I calculate the break-even point?
Divide your fixed costs by the contribution per unit, which is the price minus the variable cost of one unit. With $3,000 a month in fixed costs, a $50 price and $20 variable cost, each sale contributes $30, so you break even at 100 units, or $5,000 in sales.
What counts as a fixed cost?
Costs that do not change with how much you sell: rent, software subscriptions, salaries, your registered agent and accounting, insurance, platform plan fees. Advertising can be either; treat a set monthly budget as fixed.
What counts as a variable cost?
Costs you pay for each unit sold: the product itself, packaging, shipping, marketplace referral fees and payment processing. Use the fee calculators to get the per-unit fees for your platform.
What is the contribution margin?
The share of each sale left after variable costs, which goes towards fixed costs and then profit. A product with a 60% contribution margin turns 60 cents of every dollar of sales into fixed-cost cover.
How can I lower my break-even point?
Raise the price, cut the variable cost per unit (cheaper supplier, lower fees, lighter packaging), or cut fixed costs. Raising the price usually moves it fastest, because the whole increase goes to contribution.
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