The break-even point is the number of units you have to sell before your business starts making money. Below the break-even point you are losing money on every order in aggregate; above it, every additional sale drops through to profit. This calculator takes your fixed costs, your unit price, and your variable cost per unit, and returns both the number of units and the total revenue you need to cover all costs. It is designed for ecommerce operators evaluating a new SKU launch, a price change, or the viability of a marketing campaign. Understanding your break-even point is one of the most important things a founder can know, because it turns abstract profit goals into a concrete sales target that you can actually manage against.
Rent, salaries, software, and any cost that does not scale with orders.
Average selling price per unit after discounts.
COGS plus variable fulfillment, packaging, and transaction fees.
Break-Even Units
1,042
Break-Even Revenue
$83,333
Contribution Margin per Unit
$48.00
Contribution Margin %
60.00%
Break-even analysis uses the contribution margin — the amount that each unit sold contributes toward covering fixed costs. Contribution margin per unit is calculated as Unit Price minus Variable Cost per Unit. Variable costs are anything that scales with each additional order: product COGS, packaging, pick-and-pack, outbound shipping, and payment processing fees. Fixed costs, in contrast, do not change with order volume in the short term: rent, salaries, software subscriptions, and retained marketing overhead. Break-even units is calculated as Fixed Costs divided by Contribution Margin per Unit — this tells you how many units you must sell for contribution margin to fully cover fixed costs. Break-even revenue is simply Break-Even Units multiplied by Unit Price. Contribution margin percentage is the contribution margin expressed as a percentage of price. Note that break-even analysis assumes a single product or a constant product mix; if you sell multiple SKUs at different margins, you will need to run the calculation per SKU or use a weighted average.
If your break-even point is higher than your realistic monthly sales volume, the product is not viable at current pricing — you either need to raise price, reduce variable cost, cut fixed costs, or find a way to drive significantly more volume. A common mistake is to look at break-even once at launch and never revisit it. COGS shifts quarterly as raw material costs change, shipping rates move, and payment processor fees get renegotiated. Your break-even point today is probably 10 to 15 percent higher than it was when you last checked. The other trap is treating paid marketing as a fixed cost. Paid marketing scales with how much you spend; if you are reliant on ads to hit your sales target, then CAC should be factored into variable cost, not fixed cost, which will push your break-even point materially higher.
Break-even analysis tells you the target. Agentis ensures every individual order actually contributes to hitting it. The mid-market margin problem is not that founders do not know their break-even point — they usually do, at a blended level. The problem is that the blended number hides order-level losses: a promo code plus a remote-zip freight cost plus an FX shift can push a single order below its contribution margin floor, and thousands of those orders ship before anyone catches the pattern. Agentis watches every Shopify Plus checkout in real time, calculates the true contribution margin of each order against live COGS and freight, and blocks anything that falls below your defined floor before it ships. Your break-even target becomes enforced at the order level, not just measured at the period level.
The break-even point is the sales volume at which total revenue equals total costs — fixed plus variable. Below that volume, the business loses money in aggregate; above it, each additional sale contributes to profit. It is measured in both units and revenue.
Yes, but carefully. Fixed marketing overhead (brand team salary, creative software) goes in fixed costs. Performance marketing that scales with volume (Meta and Google spend to acquire each customer) should be treated as variable cost per unit and subtracted from contribution margin. Ignoring CAC is the most common mistake in ecommerce break-even analysis.
Gross margin only deducts COGS. Contribution margin deducts COGS plus all variable costs — fulfillment, packaging, payment fees, and often variable marketing. Contribution margin is the more useful number for unit economics because it is the true amount each sale contributes toward fixed costs and profit.
Every quarter at minimum. COGS shifts as raw material and shipping rates move, variable costs change when you renegotiate 3PL contracts or payment processors, and fixed costs change when you hire, add software, or expand warehouse space. Brands that recalculate once a year are almost always operating against a stale break-even target.
If contribution margin per unit is negative, you lose money on every sale and more volume makes it worse, not better. Break-even is mathematically impossible at that price. You must either raise price, cut variable costs, or discontinue the product. Agentis will flag this at the order level in real time so negative-contribution orders never ship in the first place.
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Free profit margin calculator for ecommerce. Calculate gross margin, net margin, and total profit from revenue, COGS, and operating expenses — with benchmark context.
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Margin Analysis
The revenue remaining after deducting all variable costs associated with fulfilling an order — including COGS, shipping, payment processing fees, and pick-and-pack labor.
Profit Governance
The minimum gross margin required before an order is confirmed at checkout. Orders falling below the profit floor are blocked, modified, or redirected.
Margin Analysis
The gradual, often undetected loss of profit across many orders — driven by small per-order cost overruns that compound into significant revenue erosion over time.
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