Break-Even Unit Volume

Every ecommerce business has a break-even point — the number of units you need to sell each month to cover all your fixed costs. Below that number, you lose money. Above it, every additional sale contributes pure profit. Knowing this number is fundamental to business planning, yet many founders operate without ever calculating it.

The formula divides your total monthly fixed costs by your contribution margin per unit (selling price minus all variable costs including COGS, shipping, and processing). If your fixed costs are $12,500 per month and your contribution margin is $37 per unit, you need to sell 338 units per month — roughly 11 per day — to break even.

The volume table shows profit at different unit volumes, making it easy to see how quickly profit scales once you pass the break-even point. The contribution margin from every unit above break-even drops almost entirely to the bottom line because fixed costs are already covered. This is why ecommerce businesses with high contribution margins and relatively low fixed costs can become very profitable very quickly once they achieve product-market fit.

Use this calculator when launching a new product to determine viability, when considering hiring or expanding (which increases fixed costs and therefore your break-even point), or when evaluating whether to raise or lower prices. A price increase that reduces volume by 10% but increases contribution margin by 20% can actually lower your break-even point and increase total profit — counterintuitive but mathematically true for many brands.