Why is break-even useful?

It helps you understand minimum sales targets.

What if price equals variable cost?

Then contribution per unit is zero and break-even cannot be reached.

Can I use this for services?

Yes, if you can estimate price and variable delivery cost per sale.

CalcBeacon tool

Break-even Calculator

Calculate how many units you need to sell before revenue covers fixed and variable costs.

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Fixed costs (£)

Price per unit (£)

Variable cost per unit (£)

Break-even units

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What this tool helps with

Estimate how many units you need to sell to cover fixed costs and break even.

Quick Guide

Quick answer

Break-even Calculator: The Break-even Calculator shows the sales volume needed before a product or project stops losing money. It is useful for product launches, small business planning and pricing checks.

FormulaBreak-even units = fixed costs ÷ (selling price per unit − variable cost per unit). Break-even revenue = break-even units × selling price.

The calculation uses the entered values only, so the result depends on accurate cost and revenue assumptions.

Worked exampleIf fixed costs are £1,000, price is £25 and variable cost is £15, contribution per unit is £10. Break-even units are £1,000 ÷ £10 = 100 units.

A concrete example makes it easier to check whether your result is realistic.

Common mistakeDo not forget variable costs. If every sale has packaging, fees or shipping costs, those reduce the contribution per unit.

This is one of the easiest ways to misread the result.

How to interpret the result

Break-even is not profit. It is the point where estimated revenue covers estimated costs. Profit begins after the break-even point, assuming the same cost structure continues.

Methodology

The calculator subtracts variable cost from selling price to find contribution per unit, then divides fixed costs by that contribution. It assumes price and variable cost stay constant.

Reviewed by CalcBeacon Editorial TeamCategory: Business / EcommerceUpdated June 2026Transparent formula and example

How it works

Formula

Break-even units = fixed costs ÷ (selling price per unit − variable cost per unit). Break-even revenue = break-even units × selling price.

Example

If fixed costs are £1,000, price is £25 and variable cost is £15, contribution per unit is £10. Break-even units are £1,000 ÷ £10 = 100 units.

What to check before relying on the number

Do not forget variable costs. If every sale has packaging, fees or shipping costs, those reduce the contribution per unit.

Practical Guide

Using this result in a real decision

Use this when testing a new product, a promotion, a course, a service package or a small business idea. Change one input at a time to see whether price or cost has the bigger effect.

What the result means

Break-even is not profit. It is the point where estimated revenue covers estimated costs. Profit begins after the break-even point, assuming the same cost structure continues.

Before you act on it

Check that revenue and cost values cover the same time period or sale scenario.
Include fees, shipping, fulfilment, discounts or ad spend when they affect the decision.
Compare at least one conservative scenario, not only the best-case number.

Common mistake

Do not forget variable costs. If every sale has packaging, fees or shipping costs, those reduce the contribution per unit.

This page is for planning and education. It is not financial, tax, legal or marketplace-specific advice.

Frequently asked questions

What happens if contribution is zero or negative?

If variable cost is equal to or higher than the selling price, each sale does not contribute toward fixed costs, so break-even cannot be reached with that pricing.

Is break-even the same as payback?

No. Break-even usually looks at units or revenue needed to cover costs. Payback looks at how long it takes to recover an investment.

Tool guide

How to use this calculator well

Use this when testing a new product, a promotion, a course, a service package or a small business idea. Change one input at a time to see whether price or cost has the bigger effect.

For best results, use numbers from the same source and the same period. Mixing monthly costs with single-order revenue, or gross revenue with net cost, can make the result look better than it really is.

Best useCompare pricing, campaign, product or cost scenarios before making a decision.

Risk checkDo not forget variable costs. If every sale has packaging, fees or shipping costs, those reduce the contribution per unit.

Next useful stepOpen a related margin, ROAS, ROI or break-even calculator to test the same numbers from another angle.

Related tools

Use these calculators to continue the same decision path.