Find the unit volume and revenue where a product's fixed and variable costs are fully covered.
Where you stop losing and start earning.
Break-even analysis rests on three inputs: fixed costs that don't change with volume (rent, salaries, software), variable cost per unit that scales with each sale (materials, packaging, payment processing), and the selling price. The gap between price and variable cost — the contribution margin — is what actually pays down the fixed costs, one unit at a time.
Break-even units = Fixed costs ÷ (Price per unit − Variable cost per unit). Multiply that by the price to get break-even revenue. If price is at or below variable cost, no volume of sales can ever break even — the margin needs to be positive first.
Margin of safety is how far current or expected sales sit above the break-even point — a small margin means a modest sales dip could tip the product back into a loss, which is worth knowing before committing to fixed costs like a lease or a salaried hire.
Fixed costs stay the same regardless of how many units you sell — rent, salaries, insurance. Variable costs scale directly with volume — raw materials, packaging, per-unit shipping or payment fees.
That means you're losing money on every unit sold before fixed costs are even considered — no sales volume can fix this; the price needs to increase or the variable cost needs to come down first.
Break-even is the point of zero profit and zero loss — one unit above it, you're in profit; one below, you're in loss. The 'monthly profit at current volume' stat shows exactly where you stand relative to that line.