Break-Even Calculator for Ecommerce
Work out how many orders per month your store needs before it stops losing money. Enter your fixed costs and your per-order economics, and you get a concrete monthly and daily order target.
Your numbers
Ad cost per order is optional. Leave it empty if you do not run paid traffic yet.
Results
The break-even formula
Break-even orders = Fixed costs ÷ (Selling price − Cost per order − Ad cost per order)
The bracket is your contribution margin: the money one order leaves behind after everything that order itself caused. Product cost, shipping, payment and platform fees and the advertising it took to win that customer all come out first. What remains is the only money available to pay for the costs that exist whether you sell one order or a thousand.
Dividing your fixed costs by that per-order contribution tells you how many orders it takes to cover them exactly. Below that number you are funding the business out of your own pocket; above it, every additional order drops its full contribution margin into profit. That is why a thin contribution margin is so dangerous: halving it doubles the order count you need, and the required volume can move out of reach long before the margin ever turns negative.
How to use this calculator
- 1
Add up everything you pay each month regardless of sales: apps and subscriptions, your store plan, email tools, a designer on retainer, rent. Enter the total as your fixed costs.
- 2
Enter your selling price for a typical order, then the cost that order causes you: product cost, shipping, and payment and platform fees. Use your real average order, not your best-case one.
- 3
If you run ads, add your ad cost per order (total ad spend divided by orders won). Read off the monthly order target, the revenue it implies, and the per-day number you actually have to steer by.
Fixed costs and variable costs are not the same thing
A fixed cost stays the same no matter how many orders you ship. Your store subscription, your review app, your email platform, your domain: they cost what they cost in a month with two orders and in a month with two thousand. A variable cost is triggered by the order itself. Product cost, shipping, payment processing and the ad spend that brought the buyer in all scale with volume.
Most beginners get this wrong in the same direction. They treat advertising as a monthly bill, like rent, and put it in the fixed bucket. But ad spend is the most variable cost most dropshipping stores have, because you spend more of it precisely when you sell more. Put it in the wrong bucket and your break-even number looks reassuringly small, right up to the moment you scale and the loss scales with you.
The contribution margin is the engine of the whole model. It is what a single order actually contributes toward keeping the lights on, and everything else follows from it. A store with a healthy contribution margin can carry a long list of subscriptions comfortably. A store with a tiny one is fragile: a single new app, a shipping-rate increase, or a slightly worse ad week can push the required order count somewhere the traffic will never take it.
Break-even is a target you steer by, not a number you calculate once
Every input in this calculator moves. You raise a price, a supplier raises theirs, you add an app, your ad account gets more or less efficient, a new market with different shipping costs opens up. Each of those quietly relocates your break-even point, and the number you worked out three months ago is describing a business that no longer exists.
Recalculate it monthly, ideally when you close the books for the previous month, using real numbers rather than the ones you hoped for. Then use it as a daily target. A monthly figure is abstract; the same figure divided by thirty is something you can compare against your dashboard before lunch, while there is still time to react.
Also keep two separate versions of the number in your head. The break-even for a single product only covers the costs that product causes, and it is the right lens when you are deciding whether to keep testing or kill it. The break-even for the whole store carries every subscription and every overhead, and it is the number that tells you whether the business is actually paying for itself. A product can be comfortably profitable on its own while the store around it still loses money.
Frequently asked questions
Should my own salary be part of the fixed costs?
Only if you actually pay yourself. There are two defensible views. If you take a regular draw from the business, it is a real fixed cost and belongs in the calculation, otherwise your break-even point is fiction. If you are reinvesting everything and living off other income, leave it out but calculate a second break-even that includes the salary you would need, so you know what the business has to reach before it can support you.
What is the difference between break-even orders and break-even ROAS or CPA?
Break-even orders is a volume question: how much do I have to sell this month to cover my fixed costs. Break-even ROAS or CPA is a per-order question: how much can I spend to win one customer before that order stops contributing anything. They answer different things and you need both. Use break-even ROAS when you are judging a campaign or setting bids, and use break-even orders when you are judging whether the business as a whole is viable at your current traffic level.
What if the required number of orders looks impossible?
That is useful information, not a failure. Attack it in the order of impact: first the contribution margin, because it is a divisor and small improvements move the target a lot. Raise the price, bundle to lift average order value, negotiate product cost, or improve ad efficiency so the cost per order falls. Only then look at cutting fixed costs by removing apps and subscriptions you are not really using. If the number still cannot be reached with realistic traffic, the offer itself is the problem, not the marketing.
Is ad spend a fixed or a variable cost?
Honestly, both, depending on the timeframe. A fixed daily budget behaves like a fixed cost in the short term, because it goes out whether the ads perform or not, and that is worth remembering during a bad week. Over any longer horizon it is variable: you increase budgets when you scale and cut them when you do not. Modelling it as a cost per order is the more honest approach, because it ties the spend to the thing it produced and keeps your break-even point from flattering you as you grow.