Retail break-even calculator

Know exactly how many sales you need to cover your expenses before your store makes a profit. This free retail break-even calculator computes your break-even point in both unit sales volume and total sales revenue based on your fixed monthly overheads and product unit economics.

The calculation uses only the figures you type. It does not read your store accounting records, and nothing you enter is saved.

How to use this calculator

1. Enter Fixed costs for the period: the regular overhead expenses that remain constant regardless of sales volume, such as store rent, basic utility bills, software subscriptions, insurance and salaried store management.
2. Enter Selling price per unit: the retail price charged to customers for the product or average basket.
3. Enter Variable cost per unit: the direct costs tied to each sale, including wholesale acquisition cost, packaging, card processing fees and individual delivery or shipping costs.
4. Select Calculate. To load the sample figures first, select Use example.

Each field accepts a number from 0 to 1,000,000,000. Selling price must be greater than variable cost per unit to generate a positive contribution margin.

Formula and worked break-even example

Unit contribution margin = selling price − variable cost per unit

Break-even units = fixed costs ÷ unit contribution margin (rounded up to a whole unit)

Break-even revenue = break-even units × selling price

Here are the sample values loaded by the Use example button:

Subtracting $20 variable cost from the $50 retail price leaves a unit contribution margin of $30. Dividing the $12,000 fixed overhead by the $30 contribution gives a break-even volume of 400 units. Selling 400 units at $50 yields a break-even sales revenue of $20,000. Every unit sold beyond 400 contributes directly to net store profit.

Before you rely on the numbers

• Align time periods. If fixed costs cover one calendar month, the resulting break-even volume represents the units you need to sell in that same month.
• Factor in multiple product lines. Most retail stores sell varied items with differing profit margins. If you have many products, use your store's average transaction value and blended gross margin from the margin and markup calculator.
• Check realistic sales velocity. Compare your break-even target against typical inventory velocity using the sell-through calculator to verify that target sales match consumer demand.

Frequently asked questions

What is the difference between fixed and variable costs?

Fixed costs are expenses you must pay even if your store opens and sells nothing: shop lease, property tax, base utilities and permanent management salaries. Variable costs rise and fall with every transaction: wholesale product cost, wrapping paper, credit card interchange percentages and courier postage.

What happens if variable costs exceed the selling price?

If a product costs more to produce and sell than its retail price, it produces a negative contribution margin. Selling more units increases overall losses rather than moving toward break-even. In that case, raise retail prices or negotiate lower supplier costs.

How does a discount or sale affect my break-even volume?

Offering discounts reduces unit contribution margins, which increases the number of units you must sell to break even. Use the calculator to compare standard pricing against promotional pricing before launching a promotion.

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