Marketing
What is your profit margin and break-even point?
Margin, markup and how many units you need to sell to cover fixed costs.
Quick answer
Margin and break-even are the two numbers every seller should know before scaling ads or hiring. Margin tells you how much of each sale is actually yours after product cost; break-even tells you how many sales you need each month before fixed costs (rent, software, salary) are covered.
Profit margin
55.1 %
- Markup on cost
- 122.7 %
- Profit per unit
- $27.00
Margin is profit ÷ price; markup is profit ÷ cost — don’t mix them when pricing. Break-even ignores taxes and seasonality: use it as a floor, not a forecast.
How it works
They are easy to confuse: margin is profit ÷ selling price; markup is profit ÷ cost — a 50% markup is only a 33% margin. The calculator switches between both views. For break-even, if your price barely exceeds variable cost, you need enormous volume — that is when you fix pricing before buying more inventory. E-commerce sellers often pair this with a shipping scale for orders to stop underestimating postage in unit economics.
Frequently asked questions
What is a good profit margin for e-commerce?+
Healthy DTC brands often target 50–70% gross margin on product (before ads and overhead). After ads, many operate on 10–20% net margin at scale. If gross margin is under 40%, fix COGS or pricing before spending heavily on traffic.
Fixed vs variable costs — what goes where?+
Variable costs move with each unit sold: product, packaging, shipping label, payment fees. Fixed costs stay roughly the same whether you sell 10 or 1,000 units: rent, salaries, base software subscriptions, insurance. Break-even only needs variable cost per unit in the formula; fixed costs sit on top.
My break-even units seem impossibly high — what now?+
Either your contribution margin per unit is too thin (raise price or cut variable costs), or your fixed costs are too high for this product line. Sometimes the answer is a different SKU with better economics, not more marketing on a loser.
Does break-even include taxes?+
This calculator uses pre-tax profit. Taxes come after break-even — plan a net margin buffer on top of the breakeven revenue for income tax and VAT if you are not passing it through separately.
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