Break-Even Calculator — Units & Revenue to Cover Costs
Calculate your break-even point in units and revenue from fixed costs, price and variable cost per unit — plus contribution margin.
Last reviewed 2026-10-01. Rates change — verify against the official sources linked below before relying on these figures.
What this is based on
- Fixed costs are constant per period regardless of volume.
- Variable costs scale linearly with units sold.
- Single product / blended average margin — for multiple products, use your average unit economics.
The one number that runs the whole business
Break-even analysis compresses your entire business model into one sentence: 'I must sell N units a month just to keep the lights on.' Everything above N is profit; everything below is loss funded by your runway.
With $5,000 of monthly fixed costs and a $30 contribution margin, break-even is 167 units — about 6 units a day. Whether that's easy or impossible tells you more about your business than any motivational metric.
Contribution margin is where games are won
The contribution margin — price minus variable cost — is what each sale actually contributes to the business. A $50 product with $20 of product cost, $6 shipping and $1.50 of payment fees has a real margin of $22.50, not $30. Count every per-unit cost or you'll 'break even' while bleeding cash.
This is also why cheap products are structurally hard: at a $5 contribution margin you need 1,000 units to cover $5,000 of fixed costs. High margins buy you a business that works at realistic volumes.
Three levers to lower break-even
Cut fixed costs (the cleanest lever — every dollar removed lowers break-even permanently), raise price (more powerful than it looks: a $5 price increase on a $30 margin drops break-even by 17%), or cut variable costs (supplier negotiation, cheaper shipping). Marketing scales volume but doesn't move the point — fix the math before you scale it.
Frequently asked questions
- How do you calculate the break-even point?
- Break-even units = fixed costs ÷ (price − variable cost per unit). That denominator — the contribution margin — is what each unit contributes to covering fixed costs.
- What is a good contribution margin?
- It depends on the business, but as a rule: the higher your fixed costs, the bigger your margin must be. Software runs 70–90%; physical products often 30–60%.
- What if my price equals my variable cost?
- Then each unit contributes nothing toward fixed costs and break-even is infinite — you lose money on every sale no matter the volume. Raise price or cut variable cost.
- Is break-even per month or total?
- Either works — just keep the period consistent. If fixed costs are monthly, the result is units per month.
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