Free Profitability Planning Tool Business & Profitability

Break-Even Revenue Calculator

Find the sales level your business needs to cover its costs.

Enter your fixed costs, selling price and variable cost per unit to estimate the revenue and unit volume required to reach break-even.

Use the calculator when evaluating a new product, wholesale programme, sourcing project, retail collection or manufacturing opportunity before committing capital.

Free to use Instant estimate Built for sourcing & trade

Revenue Calculate break-even sales

Units Estimate break-even quantity

Margin Measure contribution margin

Currency

Use the same currency for fixed costs, selling price and variable costs.

Total Fixed Costs

Enter costs that generally remain fixed over the period being analysed, such as rent, salaries, software, insurance, administration or allocated overhead.

Selling Price per Unit

Enter the net selling price you expect to receive for one unit before taxes that do not represent business revenue.

Variable Cost per Unit

Include costs that increase as units are sold or produced, such as product cost, manufacturing, packaging, commission or other unit-linked costs.

Important

Your selling price must be greater than variable cost per unit for a commercially meaningful break-even calculation. If contribution per unit is zero or negative, additional sales will not recover fixed costs under this simple model.

Break-Even Estimate

Your Break-Even Analysis

Enter your cost and pricing data

Add fixed costs, selling price and variable cost per unit to calculate your break-even revenue.

Estimates generated by this calculator are for preliminary planning only. Actual manufacturing cost, finished weight, material consumption, packing, freight, duty, container utilization or other commercial results may vary according to construction, specifications, production method and supplier.

About this calculator

What Is a Break-Even Revenue Calculator?

A business reaches its break-even point when total revenue is sufficient to cover both fixed and variable costs. At this point, operating profit under the simplified model is approximately zero: the business has covered the costs included in the calculation but has not yet generated profit above them.

Primeval's Break-Even Revenue Calculator helps product businesses, retailers, importers, wholesalers, manufacturers and sourcing teams understand how much revenue and how many units may be required to recover their fixed costs.

The calculation is particularly useful when evaluating a new product launch, wholesale collection, sourcing programme or business model where management needs to connect product pricing with cost structure and sales targets.

Break-even analysis should be treated as a planning tool rather than a complete financial forecast. Real businesses can experience different prices, discounts, product mixes, returns, taxes, commissions, freight rates and changing overhead costs.

Simple process

How to Calculate Break-Even Revenue

Enter your specifications and use the result as a practical starting point for product, sourcing and shipment planning.

Enter total fixed costs

Add the fixed costs allocated to the period, project or product programme you want to analyse.

Enter selling price per unit

Use the net revenue you expect to receive for each unit sold.

Enter variable cost per unit

Add the costs that vary with each additional unit sold or produced.

Calculate contribution per unit

Selling price minus variable cost gives the amount each unit contributes toward fixed costs and eventually profit.

Calculate break-even units

Fixed costs are divided by contribution per unit to determine the theoretical number of units required to reach break-even.

Calculate break-even revenue

Fixed costs are divided by the contribution margin ratio to estimate the sales revenue needed to cover the included cost structure.

Break-even revenue is based on the contribution margin ratio. Contribution represents the portion of each sale remaining after variable costs. That contribution first covers fixed costs; sales above the break-even point can then contribute toward operating profit.

Formula

Break-Even Revenue = Fixed Costs ÷ Contribution Margin Ratio

What the values mean

Fixed Costs: Costs that do not normally change directly with each additional unit sold within the analysed range.
Selling Price: Net sales revenue received per unit.
Variable Cost per Unit: Costs associated with producing, purchasing, processing or selling one additional unit.
Contribution per Unit: Selling price minus variable cost per unit.
Contribution Margin Ratio: Contribution per unit divided by selling price.
Break-Even Revenue: The theoretical level of sales revenue at which contribution covers fixed costs.

Practical examples

Break-Even Revenue Examples

See how typical values translate into a useful planning estimate.

Example 1

Wholesale Product Business

Suppose a product sells for $40 and has a variable cost of $22. Each sale therefore generates $18 of contribution toward fixed costs.

Fixed Costs: $25,000
Selling Price: $40
Variable Cost: $22
Contribution per Unit: $18

Result Break-even revenue ≈ $55,555.56

Example 2

Private-Label Home Textile Collection

A retailer launches a private-label collection with development, marketing, salaries and other allocated fixed costs.

Fixed Costs: $40,000
Average Selling Price: $60
Variable Cost: $30
Contribution Margin: 50%

Result Break-even revenue = $80,000

Example 3

Importer Selling to Retailers

An importer should consider product landed cost and other unit-linked selling expenses when determining the variable-cost input.

Fixed Costs: $75,000
Wholesale Price: $25
Variable Cost: $15
Contribution per Unit: $10

Result Break-even revenue = $187,500

Example 4

Higher Margin Product

Higher contribution margin means a greater percentage of each sale is available to cover fixed costs.

Fixed Costs: $20,000
Selling Price: $100
Variable Cost: $40
Contribution Margin: 60%

Result Break-even revenue ≈ $33,333.33

Break-Even Analysis

What Does Break-Even Revenue Mean?

Break-even revenue is the level of sales at which total contribution is sufficient to cover the fixed costs included in the analysis.

Below break-even, the included costs exceed contribution generated from sales. At break-even, contribution approximately equals fixed costs. Above break-even, additional contribution can begin generating operating profit, assuming the underlying cost and price assumptions remain valid.

Contribution Margin

Contribution Margin Is the Foundation of Break-Even Analysis

The break-even calculation depends on contribution margin, not gross sales alone. Contribution per unit is the difference between the selling price and variable cost associated with that unit.

If a product sells for $40 and variable cost is $22, the contribution is $18 per unit. That $18 first contributes toward fixed costs.

Selling price Revenue received from one unit before deducting variable cost.
Variable cost Cost that increases with each additional unit produced, purchased or sold.
Contribution Selling price minus variable cost.
Contribution margin ratio Contribution divided by selling price and expressed as a percentage.

Revenue vs Units

Break-Even Revenue vs Break-Even Quantity

Break-even can be expressed either as sales revenue or number of units.

Break-even quantity tells a business approximately how many units must be sold. Break-even revenue expresses the same economic relationship as the required sales value.

Break-Even Calculation Methods

Measure	Formula	Use
Break-Even Units	Fixed Costs ÷ Contribution per Unit	Product volume planning
Break-Even Revenue	Fixed Costs ÷ Contribution Margin Ratio	Sales target planning
Contribution per Unit	Selling Price − Variable Cost	Unit economics
Contribution Margin %	Contribution ÷ Selling Price × 100	Margin analysis

Fixed Costs

What Costs Should Be Included as Fixed Costs?

Fixed costs are expenses that generally do not change directly with each additional unit sold within the relevant operating range. The appropriate fixed-cost figure depends on whether you are analysing an entire business, a department, a product line or an individual project.

Rent Office, showroom, warehouse or factory rent allocated to the analysis.
Salaries Relevant fixed salaries and employment costs.
Software Recurring technology and subscription costs.
Insurance Business insurance and related fixed expenses.
Administration Accounting, compliance and general administrative expenditure.
Marketing Commitments Campaign expenditure that does not depend directly on units sold.
Product Development Allocated design, sampling or development costs where appropriate.

Variable Costs

What Should Be Included in Variable Cost per Unit?

Variable cost should reflect expenses that increase as units are produced, purchased or sold. For an importer or product brand, landed product cost can often form a major part of variable cost.

Product purchase cost Supplier or manufacturing cost allocated per unit.
Freight International or domestic freight allocated per unit when it behaves as a variable cost.
Import duty Non-recoverable duty attributable to imported merchandise.
Packaging Unit packaging and fulfilment materials.
Sales commission Percentage or per-unit commission tied directly to sales.
Marketplace fees Transaction fees that vary with sales.
Payment processing Variable transaction charges where applicable.

Product Businesses

Why Break-Even Analysis Matters for Importers and Retailers

Importing and product sourcing often require cash commitments before sales revenue is generated. Samples, deposits, inventory, freight, warehousing and marketing can create significant financial exposure.

Break-even analysis helps a buyer translate these commitments into a measurable sales objective before approving the order.

Evaluate a new collection Estimate the revenue required for a new product launch to cover allocated fixed costs.
Compare supplier prices Understand how changes in landed product cost affect break-even.
Test retail pricing See how selling-price decisions affect contribution margin.
Set sales targets Translate cost structure into required revenue and units.
Plan inventory Compare break-even units with MOQ and intended purchase quantity.

MOQ Planning

Compare Break-Even Quantity with Supplier MOQ

For importers and private-label buyers, break-even units should be considered together with supplier minimum order quantity.

If the supplier requires 1,000 pieces but the financial model indicates break-even at 1,800 units, selling only the initial MOQ would not necessarily recover the fixed costs included in the model.

Conversely, if break-even volume is substantially below the MOQ, buyers should still consider inventory risk, cash flow and expected sell-through before placing the order.

Pricing

How Selling Price Changes Break-Even Revenue

When variable cost remains unchanged, increasing selling price raises contribution per unit and normally lowers the number of units required to cover fixed costs.

However, a higher selling price can also influence market demand. Break-even calculations therefore should be combined with realistic assumptions about customer willingness to pay and expected sales volume.

Cost Control

How Variable Cost Affects the Break-Even Point

Reducing variable cost increases contribution per unit if selling price remains unchanged. This can lower break-even volume and required break-even revenue.

For sourcing businesses, variable-cost improvements can come from better factory pricing, improved packaging efficiency, freight consolidation, reduced wastage or more efficient fulfilment.

Fixed Cost Control

How Fixed Costs Affect Break-Even Revenue

Higher fixed costs require greater total contribution before the business reaches break-even. Lower fixed costs reduce the sales level necessary to recover those costs.

Businesses should therefore use a fixed-cost figure that matches the purpose and period of the analysis rather than combining unrelated expenses without a clear basis.

Margin

Contribution Margin Is Different from Gross Margin

Contribution margin and accounting gross margin can sometimes look similar, but they are not automatically identical. Contribution analysis classifies costs according to whether they vary with sales volume for the purpose of break-even modelling.

Businesses should classify costs consistently rather than assuming every cost of goods item or operating expense belongs in the same category.

Profit Planning

Break-Even Is Only the Starting Point

Reaching break-even means covering the costs included in the model. Most businesses need to generate revenue beyond break-even to achieve their target operating profit and return on invested capital.

Once break-even has been calculated, buyers can build additional scenarios based on target profit, sales growth, price reductions, promotional discounts or higher freight and sourcing costs.

Scenario Analysis

Run Multiple Break-Even Scenarios Before Making a Decision

A single break-even calculation represents only one set of assumptions. Better planning usually involves testing several scenarios.

Base case Use the most realistic expected price and costs.
Lower-price case Test how discounts or competitive pricing change break-even.
Higher-cost case Model freight, currency or manufacturing cost increases.
Improved sourcing case Evaluate the effect of lower landed product cost.
Higher-margin case Test whether premium positioning materially reduces required sales volume.

Multi-Product Businesses

Break-Even Analysis Is More Complex with Multiple Products

This calculator assumes one representative selling price and variable cost per unit. Businesses selling multiple products at different margins need to consider their expected sales mix.

If the sales mix changes materially, the weighted average contribution margin can also change, moving the overall break-even point.

Important

Break-Even Revenue Is a Planning Estimate

This calculator provides a simplified break-even estimate using fixed costs, selling price and variable cost per unit. It does not create a complete profit-and-loss forecast.

Actual performance can differ because of discounts, returns, taxes, currency changes, multiple product margins, inventory write-offs, bad debt, financing costs and changes in sales volume or cost structure.

For importers & buyers

Before Using Break-Even Analysis for a Buying Decision

Break-even calculations are most useful when the underlying inputs reflect realistic commercial conditions. Before committing to inventory, compare the result with MOQ, expected sell-through, cash flow and market demand.

Use landed product cost

For imported products, supplier price alone may understate true variable cost.

Include realistic discounts

If products are routinely discounted, use an expected net selling price rather than headline retail price.

Check supplier MOQ

Compare minimum purchase requirements with estimated break-even volume.

Consider returns

Retail returns and allowances can reduce effective revenue.

Test multiple scenarios

Run conservative and optimistic assumptions instead of relying on one forecast.

Review cash flow separately

A profitable break-even model does not automatically mean the business has sufficient working capital.

Source with Primeval

Planning a Home Textile Product Business?

Primeval helps international buyers source home-textile products from India. Once you understand your target contribution margin and break-even requirements, you can work backwards toward the product cost required to support your business model.

Share your product specification, target cost, quantity, packaging and destination market with Primeval for a sourcing discussion.

Cushion covers
Rugs and carpets
Throws
Curtains
Bed linen
Table textiles
Bath textiles
Private-label development
Custom designs
Supplier sourcing
Factory pricing
Sampling support
Packaging development
Wholesale manufacturing
Export sourcing from India

Buyer questions

Break-Even Revenue Calculator FAQs

Helpful answers about calculations, sourcing estimates and commercial planning.

What is break-even revenue?

Break-even revenue is the theoretical sales revenue required for contribution from sales to cover the fixed costs included in the analysis.

How do you calculate break-even revenue?

Divide fixed costs by the contribution margin ratio. The contribution margin ratio equals selling price minus variable cost, divided by selling price.

What is the break-even revenue formula?

Break-Even Revenue = Fixed Costs ÷ Contribution Margin Ratio.

How do you calculate break-even units?

Divide total fixed costs by contribution per unit. Contribution per unit equals selling price minus variable cost per unit.

What is contribution per unit?

Contribution per unit is selling price minus variable cost per unit. It represents the amount available from each unit to cover fixed costs and then contribute to profit.

What is contribution margin percentage?

Contribution margin percentage is contribution per unit divided by selling price, multiplied by 100.

What is the difference between break-even revenue and break-even units?

Break-even units express the required sales volume as pieces or units. Break-even revenue expresses the required sales level as monetary value.

What are fixed costs?

Fixed costs are expenses that generally do not change directly with each additional unit sold within the relevant operating range, such as certain rent, salaries and administrative expenses.

What are variable costs?

Variable costs change with production or sales activity. Examples can include product cost, unit packaging, commissions and transaction-linked charges.

Should product purchase cost be treated as a variable cost?

For many product businesses it is commonly treated as a variable cost because additional units sold generally require additional merchandise cost.

Should freight be included in variable cost?

If freight is attributable to individual products or varies materially with units purchased or sold, an allocated freight amount may be included depending on the purpose of the analysis.

Should import duty be included in variable cost?

Non-recoverable import duty attributable to merchandise can often be included when calculating the relevant landed variable cost for an importer.

What happens if variable cost equals selling price?

Contribution per unit becomes zero. Under the simple break-even model, sales generate no contribution toward fixed costs, so there is no finite commercially meaningful break-even volume.

What happens if variable cost is higher than selling price?

Contribution becomes negative. Selling additional units would increase the loss under the simplified assumptions, so pricing or cost structure needs to change.

Does a higher selling price reduce the break-even point?

If unit variable cost and fixed costs remain unchanged, a higher selling price increases contribution and normally lowers the break-even quantity.

Does reducing product cost reduce break-even?

If selling price remains unchanged, reducing variable product cost increases contribution margin and normally reduces the units required to cover fixed costs.

Does increasing fixed cost increase break-even revenue?

Yes, assuming contribution margin remains unchanged. More fixed costs require more contribution and therefore more sales before break-even.

Is break-even revenue the same as profit?

No. At break-even, contribution approximately covers the costs included in the model, so operating profit under those simplified assumptions is approximately zero.

What happens after break-even?

After fixed costs have been covered, additional contribution from sales can contribute toward operating profit, assuming costs and pricing remain consistent.

Can I use break-even analysis for a new product launch?

Yes. It can help connect development and launch costs with product margin and required sales volume.

Can importers use a break-even revenue calculator?

Yes. Importers can use landed product cost as part of variable cost and compare required break-even sales with MOQ and expected demand.

Can retailers use this calculator?

Yes. Retailers can evaluate selling price, merchandise cost and allocated fixed expenses to estimate required sales.

Can manufacturers use break-even analysis?

Yes. Manufacturers can analyse fixed production costs, variable production costs and selling prices, provided the cost classifications are appropriate.

Can I calculate break-even for a wholesale business?

Yes. Use your expected net wholesale selling price, realistic variable cost per unit and the relevant fixed costs.

Does the calculator include tax?

The calculator does not separately calculate tax. Use revenue and cost values that are appropriate for your accounting and planning purpose.

Does the calculator include financing costs?

Not automatically. Financing costs should be considered separately or included in the appropriate cost category when relevant to the analysis.

Can this calculator handle multiple products?

This version is designed around one representative unit economics model. Multi-product businesses should consider a weighted average contribution margin based on expected sales mix.

What currency can I use?

You can select USD, EUR, GBP, INR, AUD, CAD or AED. All monetary inputs should use the same currency because the calculator does not perform live currency conversion.

Is break-even analysis enough to decide whether I should launch a product?

No. It should be considered alongside demand, inventory risk, working capital, cash flow, competition, returns, lead time and expected profitability.

Is the calculated break-even revenue guaranteed?

No. It is a planning estimate based on the inputs entered. Actual results depend on real sales volume, pricing, cost behaviour and operating conditions.

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Know Your Target Cost? Source Products from India.

Use your break-even and margin calculations to determine the product cost your business model can support. Then share your product, specifications, target price and quantity with Primeval for a sourcing discussion with Indian manufacturing capabilities.

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