Break-Even Calculator
Find how many units you need to sell each month to cover your fixed costs, and how many to reach a profit target.
How to calculate your break-even point
Your break-even point is the number of sales at which your store stops losing money: the contribution from each sale has paid all of your fixed costs for the month. Every sale after that adds its full contribution to your profit.
Break-even units = Fixed costs ÷ Contribution per unit
Break-even revenue = Fixed costs ÷ (Contribution per unit ÷ Price)
Units for a target profit = (Fixed costs + Target profit) ÷ Contribution per unit
Worked example
A store has $5,000 of fixed costs a month and sells a product for $40 that costs $22 to make and ship. Each sale contributes $18, so the store breaks even at 5,000 ÷ 18 = 277.8, rounded up to 278 units, or about $11,111 in sales. To make a $2,000 profit it needs 7,000 ÷ 18 = 389 units.
Break-even calculator FAQ
What counts as a fixed cost?
Anything you pay each month whether you sell one unit or a thousand, such as software subscriptions, rent, salaries, insurance and a fixed advertising budget.
What is contribution margin?
Contribution is what each sale leaves after its variable costs: the price minus the product, packaging, shipping and payment costs. That money first pays your fixed costs and then becomes profit. Contribution margin is the same amount as a share of the price.
Why is the number of units rounded up?
You can't sell part of a unit, so the break-even point is the first whole unit at which your contribution covers your fixed costs.
How can I lower my break-even point?
Raise your price, lower your variable cost per unit, or cut fixed costs. Raising the price or cutting variable costs works twice: it increases the contribution from every sale.