Before setting your selling price, every ecommerce seller needs to know one critical number: the minimum price at which you stop losing money. Price below your break-even point and every sale makes you worse off — you're literally paying to fulfil orders. Price above it and you're building a profitable business. The break-even calculator answers this question precisely.
This guide covers two types of break-even analysis that every seller should understand: break-even price per product (the minimum you must charge) and break-even sales volume (the minimum units you must sell per month to cover your fixed costs).
Break-Even Price Formula
Your break-even price is the exact selling price at which your revenue equals your total costs — zero profit, zero loss. Any price above this point generates profit. Any price below it generates a loss on every sale.
The reason we divide by (1 − fee%) rather than simply adding the fee amount is that platform fees are calculated on your selling price — which means as your price rises, the fee amount also rises. This formula accounts for that compounding effect correctly.
Example: Break-Even Price on Etsy
You make handmade soap. Ingredients cost $4.50 per bar, packaging $0.80, actual shipping cost $3.90, listing fee $0.20, payment processing fixed component $0.25. Total variable costs excluding percentage fees: $9.65. Etsy's combined percentage fees: 6.5% + 3% = 9.5%.
Any listing price above $10.66 generates profit. Price the soap at $24? Your margin is strong. Price it at $11? You're barely above break-even with almost no buffer.
Our free calculator shows your break-even price automatically. After you run a calculation, the result appears alongside your profit and margin. It also shows you what price you'd need to charge to hit specific target margins (20%, 30%).
Break-Even Units Formula
Break-even units answers a different question: how many products do you need to sell each month to cover your fixed monthly costs — tools, subscriptions, storage, etc. — so the business starts generating real income rather than just breaking even on each sale.
Example: Shopify Store Monthly Break-Even
Your Shopify store has fixed monthly costs: Shopify Basic $39, email marketing app $29, review app $15. Total fixed monthly costs: $83. Your average product sells for $45 with a $12.40 net profit per unit after product cost, shipping, and payment processing.
You need to sell at least 7 units per month before your Shopify business starts generating real profit. Every unit beyond 7 contributes $12.40 directly to your profit. At 50 units/month, you're generating (50 − 7) × $12.40 = $533 in monthly profit after covering all fixed costs.
Break-Even by Platform
Platform fees directly affect your break-even price because they're percentage-based. The same product costs less to break even on lower-fee platforms.
Take a product with $10 in variable costs and $0 fixed component (simplified). Here's how the break-even price changes by platform's fee percentage:
- Shopify (2.9% processing): $10 ÷ (1 − 0.029) = $10.30
- Etsy (9.75% combined): $10 ÷ (1 − 0.0975) = $11.08
- Walmart (8% referral): $10 ÷ (1 − 0.08) = $10.87
- eBay (13% combined): $10 ÷ (1 − 0.13) = $11.49
- Amazon FBA (15% + $3.86 fulfillment): ($10 + $3.86) ÷ (1 − 0.15) = $16.30
Amazon FBA's combination of referral fee plus fulfillment fee dramatically raises the break-even price. This is why Amazon FBA sellers need to target higher selling prices (generally $25+) to achieve meaningful margins — the fixed fulfillment fee is too large relative to low-price items.
How to Use the Break-Even Calculator
Our free calculator shows your break-even price automatically after every calculation. Here's how to use it effectively:
- Run a profit calculation with your current or planned selling price.
- The Break-Even Price result shows the absolute minimum price — anything above this generates profit.
- For break-even units, scroll to the Advanced Tools section and select Break-Even Volume.
- Enter your monthly fixed costs (subscriptions, tools, etc.).
- The calculator shows how many units you need to sell to cover those fixed costs using your current per-unit profit.
Common Break-Even Mistakes
Not including your time
For handmade sellers, your time has real value. If you spend 2 hours making a product and value your time at $15/hour, that's $30 in "cost" that most break-even calculations ignore. If your calculated profit is $8 per item but you spent 2 hours making it, you're earning $4/hour — below minimum wage in most countries. Include a realistic labour cost in your break-even calculation.
Forgetting returns
If 3% of your sales result in refunds, you need to build this into your break-even. On 100 sales, 3 are effectively returned with no revenue but with your fulfilment cost already spent. Budget for a 3–5% returns buffer in your break-even calculation for physical goods.
Using gross revenue instead of selling price
Calculate break-even on your selling price (what the buyer pays), not on what you receive after fees. Platform fees apply to the selling price, so the formula only works correctly when based on the gross selling price.
Find your break-even price now — free
Enter your costs in our calculator and see your break-even price instantly alongside your profit margin. Also use the Break-Even Volume tool in Advanced Tools to find your minimum monthly sales target.
Use the Free Break-Even Calculator →Frequently Asked Questions
What does break-even mean in ecommerce?
Break-even in ecommerce means the point at which your revenue exactly covers all your costs with no profit and no loss. For a single product, this is the minimum price you must charge. For a business, this is the minimum number of sales per month needed to cover all fixed operating costs.
How do I lower my break-even price?
You can lower your break-even price by reducing your variable costs (cheaper supplier, lower shipping, better packaging), moving to a lower-fee platform, or optimising your packaging to reduce dimensional weight fees on Amazon. Every dollar you reduce in variable costs reduces your break-even price by approximately $1 ÷ (1 − fee%).
Is break-even the same as profit margin?
No — at the break-even point, your profit margin is 0%. Break-even is the floor below which you lose money on every sale. Profit margin measures how far above the break-even point you're pricing. If your break-even price is $15 and you charge $22, you have a positive margin. The higher above break-even you price, the higher your margin.
Does the break-even calculator work for Amazon FBA?
Yes. Select the Amazon FBA tab in our calculator and enter your product cost (including inbound shipping), FBA fulfillment fee in the shipping field, and your selling price. The calculator shows your break-even price automatically — accounting for Amazon's 15% referral fee and all your entered costs. For break-even units, use the Advanced Tools → Break-Even Volume tool.