E-Commerce Tools

Break-Even Point Calculator

Discover exactly how many units you need to sell to cover your fixed costs and start turning a pure profit.

Business Economics

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e.g., Monthly rent, Shopify subscription, software, salaries.

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How much the customer pays you.

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Product cost from supplier + shipping + packaging.

Break-Even Analysis

Units to Break Even

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Revenue to Break Even

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Contribution Margin (Per Unit)$0.00
Var. Costs (0%)Margin (0%)

How to Calculate Your E-Commerce Break-Even Point

The Break-Even Point (BEP) is the exact moment when your e-commerce store stops losing money and starts generating pure profit. It represents the number of units you must sell where your Total Revenue exactly equals your Total Costs.

Fixed Costs vs. Variable Costs

To accurately calculate your BEP, you must categorize your expenses into two buckets:

  • Fixed Costs: Expenses that do not change based on how many products you sell. This includes Shopify subscription fees, domain renewals, warehouse rent, base salaries, and insurance.
  • Variable Costs: Expenses that increase linearly with every sale. This includes the cost of goods sold (COGS), shipping materials, picking/packing labor, and payment gateway percentages.

The Break-Even Formula

To find your break-even point, you first calculate your Contribution Margin (Selling Price minus Variable Cost). This margin is the amount of money from each sale that "contributes" directly to paying down your fixed costs.

BEP Units = Fixed Costs / (Selling Price - Variable Cost)

Why This Matters Before Running Ads

Starting an e-commerce business without knowing your Break-Even Point is like flying blind. If you know that you need to sell 45 units a month just to cover your SaaS subscriptions and rent, you can structure your daily Facebook or Google Ads budget accordingly. It gives you a tangible daily and weekly sales target to rally your team behind.