How do I lower my break-even point?

Raise the price, reduce the variable cost per unit (cheaper materials, lower fees) or cut fixed costs. Raising the contribution margin per unit usually has the biggest effect.

What if the price is lower than the variable cost?

Then every sale loses money and there's no break-even point — selling more only increases the loss. The calculator tells you when that's the case.

Break-Even Calculator

Work out how many units you need to sell — and how much revenue that means — before your business, product or side project stops losing money and starts making a profit.

Fixed costs (for the period)

Rent, salaries, software, insurance — costs that don't change with sales.

Selling price per unit

Variable cost per unit

Materials, shipping, payment fees — costs for each unit sold.

Target profit (optional)

Break-even units = (fixed costs + target profit) ÷ (price − variable cost per unit). The contribution margin is what each sale contributes towards fixed costs. Assumes one price, constant costs per unit and that everything you make is sold — real businesses with several products, discounts or volume pricing need a more detailed model. Not financial advice.

445

Break-even units

$20,025.00

Break-even revenue

$27.00 (60%)

Contribution margin per unit

Each unit sold contributes $27.00 towards your $12,000.00 of fixed costs. The exact figure is 444.44 units, rounded up because you can't sell part of a unit.

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How to use break-even calculator

1Enter your fixed costs for the period (for example, per month).
2Enter the price you sell each unit for and the variable cost of each unit.
3Optionally add a profit target to see the sales needed to reach it.
4Read the break-even units, break-even revenue and contribution margin.

About this tool

Break-even point = fixed costs ÷ (price − variable cost per unit). With $12,000 of monthly fixed costs, a $45 price and $18 of variable cost per unit, each sale contributes $27, so you need 445 sales a month (444.4, rounded up) — $20,025 of revenue — to break even.

Fixed costs don't change with sales: rent, salaries, software subscriptions, insurance. Variable costs scale with each unit: materials, packaging, shipping, payment processing and marketplace fees. The difference between price and variable cost is the contribution margin — what each sale contributes towards covering fixed costs, then profit.

The model assumes a single price and constant costs per unit. If you sell several products, use an average price and variable cost weighted by your sales mix, and remember that discounts and volume pricing change the result. Use it for planning and pricing decisions, not as financial advice.

Frequently asked questions

The number of sales at which total revenue equals total costs, so you make neither a profit nor a loss. Every sale after that adds its contribution margin to profit.

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