Break-even calculator
Enter your monthly fixed costs, your price and what each unit costs you. You'll get the units and sales you need each month to cover costs.
Formula
Break-even units = fixed costs ÷ (price − variable cost per unit)
Price minus variable cost is what each unit contributes. Fixed costs are what you pay no matter how much you sell: rent, salaries, software, insurance.
How to calculate break-even: a worked example
A store has $10,000 of fixed costs a month. It sells a product for $40, and each unit costs $22 to make, ship and sell.
- Contribution per unit = $40 − $22 = $18
- Break-even units = $10,000 ÷ $18 = 556 a month
- Break-even sales = 556 × $40 = $22,240 a month
The store needs about 19 sales a day before it makes a dollar of profit.
What is a good break-even point?
One you clear with room to spare. Margin of safety = (units you sell − break-even units) ÷ units you sell. It's how far sales can fall before you lose money.
If the store above sells 700 units a month, its margin of safety is (700 − 556) ÷ 700 = 20.6%. A slow month of 20% fewer sales would still break even.
Questions about break-even
- What counts as a fixed cost?
- A fixed cost stays the same whether you sell 10 units or 1,000: rent, salaries, software subscriptions, insurance and loan payments. Costs that rise with each sale, like product cost, shipping and payment fees, are variable.
- Where does ad spend go in a break-even analysis?
- Either place works if you're consistent. If you spend a set budget each month, treat it as fixed. If you pay per order, add your cost per order to the variable cost of each unit.
- How do I lower my break-even point?
- Raise the price, lower the cost per unit or cut fixed costs. A higher price usually moves it most: in the example, a $45 price drops break-even from 556 to 435 units a month.
Do it with Replo
Start selling and cover costs sooner
Describe your product. Replo builds the store with checkout working, so your first sales start covering costs.
Prompt: “build a store to sell my handmade soap”