E-commerce Break Even Calculator
Calculate how many monthly orders and total sales revenue your store must generate to cover fixed software, salaries, and operational overhead.
SaaS, office, staff, phone, insurance
COGS + packaging + postage + fees + CPA
E-commerce Break-Even Formula
Break-Even Orders = Fixed Monthly Costs / Contribution Margin Per Order; Contribution Margin = Average Order Value - Variable Cost Per Order- Fixed Monthly Costs: Platform subscriptions, software apps, office rent, salaries, and retainers.
- Variable Cost Per Order: Product COGS, packaging, pick-and-pack fulfillment, merchant fees, and ad CAC.
- Contribution Margin: Dollars generated per order that directly contribute to paying fixed overhead.
- Break-Even Revenue: Minimum gross merchandise volume required to achieve exactly $0 in net profit.
Step-by-Step Worked Example
Calculation Steps:
How to Use This Calculator
Assumptions & Limitations
- Assumes fixed overhead does not increase within the current sales volume tier.
- Variable costs scale linearly with each additional order shipped.
Frequently Asked Questions
What is a contribution margin in e-commerce?
Contribution margin is the cash remaining from a sale after deducting all variable expenses (COGS, shipping, payment fees, packaging, and ad spend). It represents the funds available to pay your fixed monthly bills.
What if my contribution margin is negative?
A negative contribution margin means you lose money on every order you ship. Increasing sales volume will only accelerate losses. You must immediately raise prices or reduce unit fulfillment costs.
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