Break-Even Calculator for eCommerce Sellers

Break-even point is the number of units you need to sell to cover all your costs—both fixed (rent, salaries) and variable (product cost, commission, shipping). At break-even, you're not making profit but also not losing money. It matters because: (1) It shows if your business is viable—if break-even is unrealistically high, your pricing or costs need adjustment, (2) It sets clear sales targets—you know exactly how many units to sell before earning profit, (3) It helps with planning—understand how long until you become profitable, (4) It guides decisions—see the impact of price changes or cost reductions on sustainability.

Fixed costs stay the same regardless of sales volume: monthly rent for storage/office, employee salaries, software subscriptions (accounting, inventory management), business licenses and registrations, loan EMIs, internet and utilities. Variable costs change with each sale: product cost (what you pay supplier), packaging materials, marketplace commission, shipping & fulfillment fees, payment gateway charges, labels and printing. If a cost increases when you sell more units, it's variable. If it stays the same whether you sell 0 or 1000 units, it's fixed. For accurate break-even calculation, separate these clearly.

Yes, include advertising as a fixed cost if you spend consistently each month (e.g., ₹15,000/month on Amazon PPC or Facebook Ads). This gives you a realistic break-even that accounts for customer acquisition costs. However, you can also calculate two scenarios: (1) Break-even without ads (shows organic sales needed), (2) Break-even with ads (shows sales needed including marketing investment). Many sellers start with organic break-even, then add advertising once they understand their unit economics. Remember: ads increase your break-even point but can also help you reach it faster by driving more sales.

Returns and cancellations increase your effective break-even point. If you have 10% return rate, you actually need to sell 10% more units to achieve the same net sales. For example, if break-even is 300 units with 10% returns, you need to gross 330 units (300 net + 30 returns). Factor returns into your planning by: (1) Calculate standard break-even first, (2) Add 10-20% buffer based on your category (fashion has higher returns than electronics), (3) Monitor actual return rates from your seller dashboard, (4) Consider return shipping costs as part of variable costs. Returns are normal in eCommerce—plan for them.

There's no universal "good" number—it depends on your product, market, and capacity. However, guidelines: (1) If you can reach break-even in 30-90 days, that's healthy for new products, (2) Break-even should be 30-50% of your realistic monthly sales capacity, (3) Lower break-even is always better—gives you safety margin, (4) If break-even requires more sales than your marketplace category typically sees, reconsider pricing or costs. For example, if you can realistically sell 100 units/month but break-even needs 150, you'll lose money. Either increase price, reduce costs, or choose a different product. Use this calculator to test different scenarios before committing.

No. This is a planning and estimation tool to help you understand your business economics. For official accounting, tax filing, compliance, and financial reporting, consult a Chartered Accountant (CA). Use this calculator for: (1) Quick scenario planning and decision-making, (2) Understanding impact of pricing or cost changes, (3) Setting initial sales targets and goals. For tax planning, GST filing, business structure decisions, and legal matters, work with qualified professionals. This tool provides educational insights—not financial or legal advice.