How many units do you need to sell to break even?

Only three numbers

• Fixed costs: what you pay in the period regardless of sales, like rent and your store subscription.
• The selling price per unit.
• Variable cost per unit: what you pay for each unit you sell, like the product cost and packaging.

The gap between the selling price and the variable cost is called the “contribution”, what each unit contributes toward covering fixed costs. Units needed = fixed costs ÷ contribution.

An example for a small store

So the first 100 units you sell each month only cover costs, and every unit after that adds 45 to your profit.

Fractions round up

You cannot sell part of a unit. If fixed costs are 1,000, the price 50 and the variable cost 33, the mathematical answer is 58.82 units. The Break-even calculator shows you that number, and also 59 units as the real number you need to sell, because rounding down would leave you at a loss.

When breaking even is impossible

If the selling price is less than or equal to the variable cost, every unit you sell covers none of your fixed costs, and may deepen your loss. For example, a price of 70 with a variable cost of 75. There is no break-even point however much you sell, and the calculator tells you so plainly instead of showing a negative number.

What to do with the result

• If the number is more than you can sell, raise the price or cut the variable or fixed costs. Try different prices with the Selling-price calculator.
• Check the margin on each unit with the Profit margin calculator.
• If you spend on ads, check whether the campaign covers its cost with the ROAS calculator before adding it to fixed costs.