Know exactly how many units you must sell to cover every cost — and how many more you need to hit the profit you want. Works for any product or platform.
fixed costs ÷ (price − variable cost)Break-even answers a deceptively simple question: how many orders do I need before this product stops losing me money? Every sale first has to cover the fixed costs that exist whether or not you sell anything — your Shopify or other subscriptions, software, tooling and any fixed ad budget. What is left from each order after its variable costs is called the contribution margin, and it is the amount that chips away at those fixed costs.
Work through it per product, not just per store. Include in the variable cost everything that scales with each order: cost of goods, packaging, actual shipping and the marketplace or payment fee. If the break-even unit count is far above what you realistically sell in a month, that is an early signal to raise the price, lower the cost, or reduce a fixed subscription — long before the cash runs out.
Remember the result assumes your fixed and variable costs split cleanly. Returns, seasonality and selling several products together all shift the real number, so revisit it as those change.
Fixed costs ÷ contribution margin per unit (price − variable cost).
Fixed = subscriptions/overhead; variable = product, shipping, packaging and fees per unit.
(Fixed costs + target profit) ÷ contribution margin.
Contribution margin is what each sold unit contributes toward covering fixed costs: selling price minus all per-unit variable costs. A high contribution margin means fewer sales are needed to break even; a thin one means you must move a lot of volume just to cover overhead.
Fixed, recurring ad budgets belong in fixed costs. Per-order costs such as a percentage marketplace ad fee that only applies when you make a sale belong in the per-unit variable cost. If your ad spend changes month to month, run the calculator with the figure that matches the period you are planning.
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