Break-Even Calculator Guide 2026: Units, Revenue & Contribution Margin
Your break-even point is the most important number in your business — the sales level where revenue finally covers costs. This guide shows you the formula, the role of contribution margin, and how to lower your break-even.
Rent, software, salaries, insurance
COGS, packaging, shipping per unit
What the customer pays per unit
Extra profit you want above break-even
✓Your Results
Enter a selling price above your variable cost to see results.
Use the calculator above to run your numbers. For a full-page experience, open the standalone calculator.
What Is a Break-Even Point?
Break-even is the sales volume where total revenue equals total costs — no profit, no loss. Sell one unit beyond it and you earn profit; sell one below and you lose money. It separates costs into fixed (rent, software, salaries) and variable (COGS, packaging, shipping per unit).
The Break-Even Formula
Contribution Margin = Selling Price − Variable Cost per Unit. Break-Even Units = Fixed Costs ÷ Contribution Margin. Add a profit target with: (Fixed Costs + Target Profit) ÷ Contribution Margin.
A Real Example
Sell a product for $35, with $12 COGS and $800/month fixed costs. Contribution margin is $23 (65.7%). Break-even = $800 ÷ $23 ≈ 35 units/month (~$1,217 revenue). Want $1,000 profit too? You need ~79 units.
Why E-Commerce Break-Even Is Different
Online sellers must include shipping, packaging, payment processing (~3%), platform fees, and returns in variable cost. Leave them out and break-even looks far easier than it is — many sellers who think they break even at 30 units actually need 45.
How to Lower Your Break-Even Point
- Raise your selling price (widens contribution margin).
- Reduce variable costs (supplier pricing, shipping, packaging).
- Trim fixed costs (unused software, better tooling).
Frequently Asked Questions
What is contribution margin?
Selling price minus variable cost per unit — the money left to cover fixed costs and profit.
What is a good break-even point?
One you reach using well under half your realistic monthly capacity, ideally with a contribution margin above 30%.
Run your numbers with the Break-Even Calculator, then dig deeper with the E-Commerce Profit Margin Calculator and Shopify Profit Calculator.