Digital product launch
A product sells for $49, costs $18 to deliver and has $4,500 in monthly fixed costs.
- Fixed costs: $4,500
- Price per unit: $49
- Variable cost: $18
- Target profit: $0
Business basics
Break-even Calculator
Find the sales volume and revenue needed to cover fixed costs and target profit.
Business basics
Break-even Calculator
Use this before launching a product, service or campaign to understand how many units must sell before the idea stops losing money.
How to use this calculator
Start with conservative inputs, copy the result, then test a best-case and worst-case version. For production decisions, compare the estimate against actual accounting, analytics and payment data.
Best used for
Use this before launching an offer to find the sales volume required to cover fixed cost and optional target profit.
Formula
Break-even analysis uses contribution per unit. If each sale contributes enough to cover fixed costs, the calculator estimates how many sales are needed before profit turns positive.
Formula
Break-even units = (fixed costs + target profit) / (price per unit - variable cost per unit).
Example
How to read the result
- A higher contribution per unit lowers the number of units needed to break even.
- If variable cost is close to price, break-even volume can become unrealistic.
- Target profit can be added to model a safer launch goal instead of only zero profit.
Common mistakes
- Forgetting fixed costs that continue even if sales are slow.
- Treating all marketing spend as optional after it has already been committed.
- Ignoring refund, inventory and tax effects on contribution.
FAQ
What counts as a fixed cost?
Fixed costs are expenses that exist even if no sale happens, such as software, rent, salaries, hosting or retainers.
What if variable cost is higher than price?
There is no practical break-even point until price rises or variable cost falls, because every sale loses money before fixed costs.
Should marketing spend be fixed or variable?
It depends on how you buy traffic. A fixed campaign budget can be modeled as fixed cost, while per-order commissions can be modeled as variable cost.
Important limits
- Break-even models assume price and unit cost stay stable as volume changes.
- Inventory, refunds, taxes and cash timing can change the real break-even point.