Calculate exactly how many units you need to sell per month to cover all fixed and variable costs.
Fixed Costs = Total monthly fixed expenses
Selling Price = Revenue per unit sold
Variable Cost = Per-unit costs: COGS + shipping + packaging + ad spend
Enter your costs and selling price above. Your break-even point will appear here once the selling price exceeds the variable cost per unit (positive contribution margin). Results update automatically as you type.
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The break-even point is the number of units you must sell to cover all fixed and variable costs, resulting in zero profit and zero loss. Every unit sold beyond this point generates profit equal to the contribution margin.
Contribution margin equals the selling price per unit minus total variable costs per unit. It represents how much each sale contributes toward covering fixed costs and generating profit. A higher margin means fewer units needed to break even.
Fixed costs in ecommerce are expenses that stay the same regardless of sales volume. These include Shopify or platform subscription fees, app and tool costs, warehouse rent, insurance, and salaried employee costs.
Variable costs change with each unit sold. They include the product cost (COGS), shipping per unit, packaging materials, transaction fees, and any per-unit advertising spend. These costs scale directly with sales volume.
Margin of safety is the percentage by which your current sales exceed the break-even point. A margin of safety of 25% means you could lose 25% of sales before becoming unprofitable. It measures how much cushion your business has against downturns.