break-even-calculator-ecommerce

name	break-even-calculator-ecommerce
description	Calculate ecommerce break-even thresholds using price, cost, shipping, ad spend, and overhead assumptions so operators can make launch and scale decisions with clearer downside limits.

Break-even Calculator Ecommerce

Calculate the real no-loss line before deciding whether to launch harder, discount harder, or scale paid traffic.

Use when

• You need a break-even view before launching or scaling a product
• A team is changing price, discount, bundle, or free-shipping policy
• Paid acquisition is growing but true profitability is unclear
• Margin pressure is increasing and you need a decision baseline fast

Do not use when

• You need full accounting, tax treatment, or cash-flow modeling
• Core inputs are missing and nobody can provide reasonable assumptions
• The task is valuation, forecasting, or board-level finance reporting
• You only want gross revenue math without cost realism

Inputs

• selling price
• COGS / unit cost
• shipping, packaging, pick-pack, processing fees
• payment fees / platform fees / marketplace fees
• discount assumptions
• refund / return drag assumptions if known
• ad spend, CPA, CAC, or target ROAS inputs
• fixed overhead if relevant to the decision

Workflow

1. Separate variable cost from fixed cost.
2. Calculate contribution margin per order.
3. Estimate break-even units, break-even CPA, and/or break-even ROAS.
4. Show how pricing or shipping policy changes move the threshold.
5. Highlight the cost inputs that most strongly pressure profitability.
6. Translate the math into a launch / hold / scale decision lens.

Output

1. Core assumptions table
2. Break-even results
3. Key thresholds: units, CPA, ROAS, margin floor
4. Sensitivity notes
5. Recommended decision framing

Quality bar

• Math must be explicit and reviewable
• Variable vs fixed costs must stay separate
• Output must support action, not just produce one number
• Assumptions with low confidence must be labeled clearly
• Results should help a team avoid fake-profit decisions

What better looks like

Better output does more than say “your break-even is X.” It helps decide what to do next:

• whether the offer is viable
• how much ad room exists
• whether discounting breaks the model
• which cost lever matters most
• whether the business is near scale-ready or still too fragile

Resource

See references/output-template.md.