How to Calculate Break-Even Point for Your Store

Break-even point is the number of units you need to sell before profit begins. It's a one-line formula, and yet most new sellers cannot answer it for their own store.

The formula

Break-even units = Fixed monthly costs ÷ (Selling price − Variable cost per unit). The denominator is called your contribution margin.

What counts as fixed cost?

Shopify subscription, app subscriptions, your salary, accounting fees, rent. Anything that costs money whether you sell 0 or 1,000 units.

What counts as variable cost?

Cost of goods, payment processing, marketplace commission, shipping, packaging, the per-unit share of ad spend. Anything that scales with each order.

What to do with the number

If break-even is higher than your realistic monthly volume, your pricing or your costs are wrong. Don't try to scale your way out — fix the unit economics first.