Break-even Analysis for Retail – When Do You Profit?
Break-even is the number of units you must sell to cover all costs. Above that, you make profit.
The Formula
Break-even units = Fixed cost ÷ (Selling price − Variable cost per unit)
Selling price − Variable cost = Contribution per unit.
Example: Fixed cost ₹10,000, variable ₹50/unit, price ₹80.
Break-even = 10,000 ÷ (80 − 50) = 10,000 ÷ 30 = 334 units.
Fixed vs Variable Cost
- Fixed: Rent, salary, electricity—same regardless of sales
- Variable: Cost per item (COGS)—rises with units sold
For Your Shop
- Calculate break-even for the shop overall
- Or per product if you want item-level view
- Seasonal shops: break-even per season
Use It To
- Set sales targets
- Decide on discounts (don’t sell below variable cost)
- Plan expansion (new fixed costs → higher break-even)
Use our Break-even Calculator. Stockkeeper tracks cost and price per item. Join the waitlist.
Frequently Asked Questions
What is break-even point?
The number of units you must sell to cover all costs. Above that, you make profit.
How do I calculate break-even?
Break-even units = Fixed cost ÷ (Selling price − Variable cost per unit).
What is the difference between fixed and variable cost?
Fixed: rent, salary—same regardless of sales. Variable: cost per item—rises with units sold.