Break-even math: how many orders until profit
Profit isn't your first sale. It's the sale where the money you make per order finally covers your fixed costs.
Break-even math tells you exactly how many orders that takes, and what moves the number.
Fastest path: one prompt, end to end
🤖 AI prompt — paste into ChatGPT / Claude
You are a unit-economics coach. Use MY numbers only.
Sell price per order: [$]
Variable cost per order (product + shipping + payment fee + packaging): [$]
Fixed costs per month (store, tools, subscriptions, any ads I'd spend regardless): [$]
Do this:
1. Compute contribution per order = price - variable cost, and my contribution margin %.
2. Compute break-even orders per month = fixed costs / contribution per order. Round up and state it plainly ('you profit starting at order N each month').
3. Estimate break-even timeline: at my expected [orders/month], how many months until I clear fixed costs and turn profitable?
4. Show the three levers that move break-even (raise price, cut variable cost, cut fixed cost) and which one helps me most given my numbers.
Do not invent any number; use only what I gave you. If something's missing, ask.
Output: contribution per order + contribution margin % + break-even orders + timeline + the lever that helps most.
Or do it in 4 steps
- Split costs into fixed and variable. Variable costs happen per order: product, shipping, the payment fee, packaging. Fixed costs happen every month no matter how many orders you get: store subscription, tools, a baseline ad spend. You can't do break-even math until every cost sits in one bucket or the other.
- Find your contribution per order. Contribution = sell price minus variable cost. It's what each order puts toward fixed costs, and then profit. A $30 order with $18 variable cost contributes $12. Contribution margin is that as a percent (here 40%). This number, not revenue, pays your fixed costs down.
- Divide to get break-even orders. Break-even orders per month = monthly fixed costs / contribution per order. Below that count you lose money. At it you're flat. Above it, every order is profit. It's the clearest 'am I a business yet?' number you have.
- Know the three levers. Break-even drops when you raise price, cut variable cost, or cut fixed cost. Which one helps most depends on your numbers. Thin margin? A small price rise or a cheaper supplier moves it hard. Bloated subscriptions? Cutting fixed cost is faster. Read unit-economics-101 first if contribution and margin are new.
Worked example (labeled): $30 sell price, $18 variable cost, so $12 contribution per order (40% margin). Fixed costs are $600/month (store, tools, baseline ads).
Break-even = 600 / 12 = 50 orders a month. Order 51 is your first profit. Expecting 25 orders/month at launch and growing 25%? You cross 50 orders around month 4. That's your break-even timeline.
Now raise price to $33. Contribution jumps to $15, break-even falls to 40 orders. One $3 change makes you profit a month sooner.
Sort costs, find contribution per order, divide by fixed costs, and you know exactly which order turns profit; then pull the one lever your numbers say moves it most.