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The break-even point is the number of units you need to sell for your total revenue to equal your total costs — meaning zero profit, zero loss. Every unit sold above break-even generates pure profit. Knowing your break-even point is essential for pricing, planning, and business viability decisions.
Fixed costs stay the same regardless of how much you sell — rent, salaries, subscriptions. Variable costs change with each unit sold — materials, packaging, payment processing fees, delivery. The difference between price and variable cost is called the contribution margin.