Break-Even Calculator

Enter your fixed costs, price per unit, and variable cost per unit to find your break-even point—the minimum sales needed to cover all costs.

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Rent, salaries, insurance, subscriptions—costs that don't change with sales

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Materials, packaging, shipping, payment fees—costs per item sold

Understanding Break-Even Analysis

What is Break-Even Point?

The break-even point is where total revenue equals total costs—you're not making profit, but you're not losing money either. Every sale after this point is pure profit (minus variable costs).

Break-Even Units = Fixed Costs / (Price - Variable Cost)

Fixed vs Variable Costs

Fixed Costs

Stay the same regardless of sales volume:

  • • Rent / mortgage
  • • Salaries (fixed staff)
  • • Insurance premiums
  • • Software subscriptions
  • • Loan payments
  • • Utilities (base amount)
Variable Costs

Change with each unit sold:

  • • Raw materials / inventory
  • • Packaging
  • • Shipping per order
  • • Payment processing fees
  • • Sales commissions
  • • Per-unit labor

Contribution Margin

The contribution margin is how much each sale "contributes" toward covering fixed costs and then profit. It's the selling price minus variable costs.

Contribution Margin = Price - Variable Cost per Unit

Using Break-Even Analysis

  • • Set sales targets – Know the minimum you need to survive
  • • Evaluate pricing – See how price changes affect break-even
  • • Assess new costs – Understand impact of hiring or new expenses
  • • Launch decisions – Determine if a new product is viable
  • • Investor pitches – Show you understand your economics

Lowering Your Break-Even Point

1. Reduce fixed costs – Negotiate rent, cut unused subscriptions, go remote

2. Raise prices – Increases contribution margin per sale

3. Lower variable costs – Better supplier deals, optimize shipping

4. Increase average order value – Bundles, upsells, minimum orders

Pro Tip

Calculate break-even for each product line separately. A product with low margins might be dragging down your overall profitability.