Break-Even Calculator
Find the exact number of units or revenue needed to cover all costs. Optionally calculate units needed to hit a profit target.
Rent, salaries, software subscriptions, loan payments
COGS, shipping, packaging per unit
Enter a profit goal to see how many units you need to sell to reach it
What Is Break-Even Analysis?
Break-even analysis tells you the exact point where total revenue equals total costs — where you're neither making nor losing money. Below break-even, you're operating at a loss. Above it, every additional unit sold generates profit equal to the contribution margin.
This is one of the most fundamental calculations for any business decision: launching a new product, setting a price, evaluating a new location, or deciding whether a business idea is viable.
Understanding Contribution Margin
The contribution margin is the selling price minus the variable cost per unit — what each unit "contributes" toward covering fixed costs. Once all fixed costs are covered (at break-even), that same contribution margin becomes pure profit on every additional unit sold.
A high contribution margin means you reach break-even faster. A low contribution margin means you need high volume to cover fixed costs. If your contribution margin is zero or negative, you can never break even regardless of volume.
Break-Even for Ecommerce Sellers
For Amazon FBA sellers, fixed costs include monthly software subscriptions and storage fees; variable costs include COGS, FBA fees, and referral fees. Use the Amazon FBA Break-Even Price Calculator for platform-specific calculations. For margin and ROI targets once you're past break-even, see the ROI Calculator.
Frequently Asked Questions
What counts as a fixed cost vs. a variable cost?
Fixed costs don't change with sales volume: rent, salaried employees, insurance, annual software subscriptions, loan repayments. Variable costs scale with each unit sold: raw materials, direct labor, transaction fees, shipping per order, commissions. Some costs are semi-variable (electricity, part-time labor) — classify them as either fixed or variable based on how they primarily behave.
How do I use break-even analysis for pricing decisions?
Model multiple price points. Raising your price increases your contribution margin, so you break even at fewer units. Lowering your price may increase volume but requires more units to cover the same fixed costs. The optimal price balances margin, volume, and market demand — break-even analysis shows you the floor, not the ceiling.
What is the margin of safety?
Margin of safety is the gap between your current (or projected) sales and the break-even point. It tells you how much sales can drop before you start losing money. Margin of Safety % = (Actual Sales − Break-Even Sales) ÷ Actual Sales × 100. A 30%+ margin of safety is generally considered healthy.
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