Break-Even Calculator
Calculate how many units you need to sell to cover all costs.
Results
Visualization
How It Works
The break-even point is the number of units you must sell before your business stops losing money and starts making a profit. Every unit sold beyond break-even contributes directly to profit. For ecommerce stores, knowing your break-even point is essential for pricing decisions, ad spend budgeting, and evaluating whether a product line is viable.
The Formula
Variables
- FC — Fixed Costs — costs that don't change with sales volume (rent, software subscriptions, salaries)
- P — Selling Price per unit
- VC — Variable Cost per unit — costs that scale with each sale (COGS, shipping, payment processing)
- CM — Contribution Margin = P - VC
- BEP — Break-Even Point in units = FC / CM
Worked Example
Suppose your store has $3,000/month in fixed costs (rent, Shopify, tools). Each unit costs $12 to produce and ship, and you sell it for $30. Contribution margin = $30 - $12 = $18 per unit. Break-even = $3,000 / $18 = 167 units. If you currently sell 250 units/month, your safety margin is 83 units (33%) — meaning sales could drop 33% before you lose money.
Practical Tips
- Reduce fixed costs first — every dollar cut from fixed costs lowers your break-even point directly.
- A higher selling price dramatically improves break-even because contribution margin grows faster than revenue.
- Track break-even separately for each product line — a low-margin SKU may never break even on its own.
- Include ad spend as a fixed cost if you run consistent monthly campaigns rather than per-unit spend.
- Aim for a safety margin above 20% — this gives you a buffer against seasonal slowdowns or unexpected costs.
Frequently Asked Questions
What counts as a fixed cost for an ecommerce store?
Fixed costs include anything you pay regardless of how many orders come in: Shopify subscription, warehouse rent, full-time salaries, software tools (email, analytics, inventory management), and insurance. Ad spend is sometimes treated as fixed if you run a consistent monthly budget.
What counts as a variable cost?
Variable costs change with each unit sold and include cost of goods (what you pay suppliers), outbound shipping, payment processing fees (typically 2–3%), and packaging materials. If a cost only exists because a sale happened, it's variable.
How does break-even change with advertising?
If you add ad spend to your fixed costs, your break-even point rises. This is why ROAS (return on ad spend) matters — you need enough revenue from ads to cover both the ad cost and the underlying fixed costs.
What is a good safety margin for ecommerce?
A safety margin of 20–30% is considered healthy for ecommerce. This means your current sales volume is 20–30% above break-even, giving you a buffer for slow months, returns, and unexpected expenses.
Should I calculate break-even per product or for the whole store?
Both. Store-level break-even tells you whether the business as a whole is viable. Product-level break-even helps you identify which SKUs are dragging down profitability and should be discontinued or repriced.