Break-Even Calculator
Calculate your break-even unit sales volume, break-even sales revenue threshold, and unit contribution margin.
Break-Even Business Parameters
To calculate break-even unit sales volume, divide total monthly fixed costs by contribution margin per unit (retail price minus variable cost per unit). To find break-even sales revenue, multiply break-even unit volume by the unit selling price. At break-even, total revenue exactly equals total combined fixed and variable costs.
What the Break-Even Calculator Does
Knowing your store's break-even point is the foundation of commercial survival. Before your business earns its first dollar of net profit, customer order sales must cover 100% of your fixed operating expenses (SaaS subscriptions, warehouse rent, salaries) and direct unit variable costs (COGS, postage, gateway fees).
The MerchSites Break-Even Calculator models your exact break-even unit sales volume, break-even sales revenue threshold, and unit contribution margin.
Who Should Use This Calculator
Designed for startup founders, product managers, and financial planners:
New Product Launch Planners
Entrepreneurs evaluating a new physical product line to determine required sales volume before investing in tooling or inventory.
Ecommerce Financial Operators
Store owners analyzing monthly baseline sales targets needed to cover fixed overhead.
Break-Even Volume & Revenue Formulas
Contribution Margin = Retail Selling Price - Variable Cost per Unit
Break-Even Units = Total Monthly Fixed Costs / Unit Contribution Margin
Break-Even Revenue = Break-Even Units × Retail Selling Price
Worked Example: Custom Soy Candle Brand
An artisan candle brand incurs $6,000.00 in monthly fixed costs (studio rent, Shopify plan, marketing apps, insurance). Each candle sells for $30.00 retail and carries $12.00 in direct variable costs ($6.50 jar/wax/scent + $3.80 shipping + $1.70 card fees).
Takeaway: The candle brand must sell at least 334 candles ($10,020 revenue) every month just to reach zero net profit. Candle #335 generates true net profit.
Common Break-Even Calculation Errors
Frequently Asked Questions
What happens after reaching the break-even point?
Once fixed monthly overhead is fully covered at break-even, every additional unit sold contributes 100% of its contribution margin directly to net profit.
Financial Disclaimer: MerchSites tools and guides provide estimates for product pricing, margin analysis, and expense planning. All calculations are performed locally in your web browser. Content is for educational purposes and does not constitute formal tax, legal, or accounting advice.