How it works
How to find your break-even point
Enter your fixed costs
Rent, salaries, insurance, software -- everything you pay regardless of how many units you sell. Add them up and enter the total.
Add per-unit costs and price
Enter what it costs to produce or buy one unit (materials, packaging, shipping) and the price you sell it for.
See your break-even point
The calculator tells you exactly how many units you need to sell, and the revenue that represents, before you stop losing money and start making profit.
How to lower your break-even point
The lower your break-even, the faster you reach profitability.
Cut fixed costs where you can
Renegotiate rent, switch to cheaper tools, consolidate software subscriptions. Every dollar you remove from fixed costs is one less unit you need to sell.
Negotiate lower variable costs
Buy materials in bulk, switch suppliers, reduce packaging. Lowering variable cost per unit increases your contribution margin and drops break-even.
Raise your price (if the market allows)
A $2 price increase on a $25 product cuts break-even by roughly 10%. Test it. If conversion does not drop, you just got profitable faster.
Use reviews to justify your pricing
Products with strong reviews can hold higher prices because customers trust the quality. That wider margin drops your break-even without needing to cut costs.
Model different scenarios
Run the calculator three times: best case, expected case, worst case. If your worst case still breaks even within a reasonable timeframe, the business is on solid ground.
Recalculate every quarter
Costs change. Prices change. What looked like a 500-unit break-even in January might be 600 by June if your supplier raised prices. Stay on top of it.
More free tools
All tools →- Profit margin calculatorMargin on every product, after cost, shipping and fees.
- Markup calculatorRetail price, profit per unit and margin from your cost.
- Psychological pricing toolSix price variants for one target price, with the reasoning.
- Discount calculatorSale price and savings for any percentage off.
FAQ
Questions, answered
It is the number of units you need to sell to cover all your costs -- both fixed and variable. Below that number you are losing money. Above it, every sale is profit. It is the most basic question any product business needs to answer.
Fixed Costs divided by (Selling Price minus Variable Cost per Unit). The bottom part of that fraction is called the contribution margin. If your fixed costs are $12,000, your product sells for $25, and variable cost is $8, you break even at 706 units.
Anything you pay regardless of how many units you sell. Rent, insurance, salaried staff, loan payments, software subscriptions. If you would still owe it even with zero sales, it is a fixed cost.
Costs that scale with production. Raw materials, packaging, per-unit shipping, payment processing fees. The more units you produce or sell, the more you spend on variable costs.
Then your contribution margin is negative, which means every sale loses money. The calculator will show zero for break-even because there is no number of units that will make you profitable at that price. You need to raise the price or lower the variable cost.
It lowers break-even because it increases the contribution margin. If you raise a $25 product to $27 with the same $8 variable cost, contribution margin goes from $17 to $19, and break-even drops from 706 to 632 units.
Yes, with some adjustment. Fixed costs work the same way. For variable costs, think about what changes per project or client -- freelancer fees, materials, software per seat. Selling price is what you charge per engagement.
At least every quarter, or whenever your costs, pricing, or business model changes. Supplier price increases, rent hikes, or a new pricing tier all shift your break-even point.
Hit break-even faster with better reviews
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