How this calculator works
Break-even is the point where the money left over from each sale has finally covered everything you have to pay whether you sell anything or not: rent, software, insurance, the machine payment.
The number that drives it is contribution — what one sale leaves behind after its own variable cost and fees. Divide your fixed costs by that, and you have the answer.
The formula
- Contribution per unit = price − variable cost − (price × fee %) − fixed fee per sale
- Break-even units = ⌈ total fixed costs ÷ contribution per unit ⌉
- Break-even revenue = break-even units × price
- Months to break even = break-even units ÷ units sold per month
What to watch for
- Units are rounded up. You cannot break even on a fraction of a sale, and rounding down would report a point you have not actually reached.
- A zero or negative contribution is an error, not a large number. If each sale loses money, selling more increases the loss and no volume ever breaks even.
- Fixed costs are the ones that do not move with volume. If a cost only exists because you made a unit, it belongs in variable cost instead.
- Contribution margin ratio — contribution divided by price — is the more portable figure. It tells you what share of every dollar of revenue is available to cover fixed costs.
Common mistakes
- Putting materials in fixed costs. They scale with volume, so they are variable.
- Leaving your own wage out of variable cost, which makes break-even look closer than it is.
- Ignoring selling fees, which can be a tenth of the price on a marketplace.
- Treating break-even as the goal. It is the point where you stop losing money, not where you start earning.
Frequently asked questions
How do I calculate my break-even point?
Work out the contribution each sale makes — the price minus the variable cost and any fees — then divide your total fixed costs by it and round up. If your fixed costs are $850 a month and each sale contributes $18, you need 48 sales a month before you have covered anything.
What counts as a fixed cost?
Anything you pay whether or not you sell: workspace rent, insurance, software subscriptions, machine finance, accounting. If a cost changes with the number of units you make — materials, packaging, transaction fees — it is variable and belongs in the per-unit figure instead.
Should I include my own wage?
Include the labour that goes into each unit as a variable cost, and any salary you draw regardless of output as a fixed cost. Leaving your time out entirely makes break-even look far closer than it is, and it is the most common reason a business feels busy but never profitable.
Why does the calculator say break-even is unreachable?
Because your contribution per unit is zero or negative — the price does not cover the variable cost and fees. Volume cannot fix that; it multiplies it. Raise the price, cut the unit cost, or move to a channel with lower fees.