Why does the calculator say I am at break-even with zero sales when my dropshipping store has no fixed costs?
Break-even is the number of units needed to cover fixed costs, so if those are zero there is nothing to cover. The calculator then shows 0 units with a note that every unit sold after that earns its contribution as profit. That is mathematically right, but it is worth asking whether your fixed costs really are zero.
What the calculator shows, exactly
Enter fixed costs of 0, a price of 99 and a variable cost of 60, which is the supplier's price plus shipping and fees, into the Break-even calculator. You get:
- A contribution of 39 per order and a contribution margin ratio of 39.39%.
- Break-even units of 0 and break-even revenue of 0.
- A note: there are no fixed costs, so you are at break-even with no sales at all, and every unit sold after that earns its contribution as profit.
That makes sense: with dropshipping you do not buy stock upfront, so each cost appears only when an order comes in. But 'zero fixed costs' is rarely true.
Fixed costs dropshippers tend to forget
- The monthly store platform plan.
- Paid apps: supplier sync, reviews, pop-ups.
- Domain and professional email, divided by 12 if billed yearly.
- A fixed monthly ad budget, if you set one in advance.
- Your time. If break-even should mean you have paid yourself, add a wage.
Add just 450 for the plan and apps, with the same price and cost. The result becomes 11.54, rounded up to 12 orders, with revenue of 1,188 and a profit of 18 at that volume. A small number, but it means the first eleven orders each month earn nothing.
Two other cases you might see
If fixed costs are zero and the price equals the variable cost, say 60 and 60, you will not get a number. The tool says there are no fixed costs and the contribution is zero, so profit is zero at any sales volume and there is no specific break-even point. In other words, you are working for free.
If the variable cost is above the price, say a price of 60 and a cost of 70 with 450 of fixed costs, the tool says every unit sold loses 10 and selling more increases the loss. It happens in dropshipping when a supplier raises prices or shipping goes up without you noticing. Review the price with the Selling-price calculator and the margin with the Profit margin calculator.
Common questions
Are pay-per-click ads a fixed cost?
If you set a fixed monthly budget, treat it as fixed. If you know your average ad cost per order, add it to the variable cost instead.
Does a result of zero mean my store is profitable?
It means every order with a positive contribution adds profit, provided your fixed costs really are zero. Check that first.
Does the tool account for returns?
No. If returns cost you money, spread that cost over paid orders and add it to the variable cost.