Digital Download Store Break-Even Analysis: $59K Monthly Revenue

Fixed costs $42.6K/mo Base overhead

Contribution margin 80.5% After variable costs

Break-even revenue $52.9K Monthly target

Break-even timing Month 26 Model crosses zero

Break-even calculator

Test monthly revenue, direct costs, and fixed overhead against the break-even point for a digital download store.

Lean Base Full

Monthly revenue Revenue sets the pool that can cover direct costs and fixed overhead. $ Low sales High sales Variable expenses Use direct costs that move with each sale, like payment and affiliate fees. $ Low fees High fees

Money available to cover fixed costs $95,298 $109,917 revenue - $14,619 variable expenses

Margin ratio

87%

Covers fixed costs

Yes

Fixed monthly costs Use the monthly cost base that overhead and payroll must cover. $ Lean overhead Heavy overhead

Break-even chart Revenue Total costs

Which expenses are fixed and which move with sales for a digital download store?

Cost classification

For this store, fixed overhead starts before sales, while delivery, security, processing, and affiliate fees move with revenue. Classify them wrong, and the Month 26 break-even can look cleaner than the model supports.

Expense	Cost	Break-Even Treatment	Common Mistake
Office Rent	Fixed	Include the full $4,500/month from Month 1 through Month 60.	Scaling rent by orders or downloads.
Enterprise Software Subscriptions	Fixed	Include the full $1,200/month in monthly overhead.	Treating subscriptions as per-sale expenses.
Cloud Hosting and CDN Services	Variable	Apply as revenue-based COGS: 4.0% in the first year.	Ignoring delivery costs because products are digital.
Digital Rights Management Security	Variable	Apply as revenue-based COGS: 2.0% in the first year.	Modeling security as a flat monthly tool only.
Payment Processing Fees	Variable	Deduct 3.5% of first-year revenue before contribution margin.	Treating payment fees as fixed overhead.
Affiliate Marketing Commissions	Variable	Deduct 10.0% of revenue tied to commissionable sales.	Forgetting commissions as affiliate volume grows.
Planned Marketing Budget	Semi-fixed	Model as planned spend: $60,000 in the first year, then $120,000 in the second year.	Treating ad spend as purely variable.
Customer Support Lead Labor	Semi-variable	Start with 0.5 FTE in the first year, then step up as ticket volume needs more coverage.	Holding support flat while repeat orders rise.

How does break-even change across lean, base, and full digital download store scenarios?

Scenario table

Lean and base stay below the fixed-cost line, so losses continue until monthly revenue clears those commitments. Full scale is the first case with a real cushion.

Planning assumptions only. Small changes in traffic, mix, or fees can move break-even.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch case	$27,417	$10,609	$47,558	61%	-$30,750	Still below the $59.1k break-even line, so cash burn remains.
Base operating case	$59,833	$19,150	$60,267	68%	-$19,583	Near break-even, but revenue still trails the $74.1k target.
Full scale case	$109,917	$28,983	$65,267	74%	$15,667	Revenue clears the $79.4k line, so cushion appears.

What breaks first if launch revenue misses plan?

Stress test

Year 1 revenue sits well below break-even, so the first risk is a wider monthly cash gap. Higher fixed spend and fee drag push break-even into the mid-$60k range, and combined pressure can delay Month 26 even more.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change; Year 1 average monthly revenue stays near $27,400.	$59,100	$31,700 gap	The plan is not at break-even in Year 1.
Revenue shortfall	Monthly revenue runs 10% below the Year 1 average, to about $24,700.	$59,100	$34,400 gap	A small miss in traffic or conversion deepens cash burn.
Fixed-cost pressure	Monthly fixed costs rise 10% to about $52,300.	$65,000	$37,600 gap	Office and staffing overhead make break-even harder to reach.
Margin pressure	Variable expenses rise from 19.5% to 24.5%, cutting contribution margin to 75.5%.	$63,000	$35,600 gap	Fees and commissions take more of each sale.
Combined pressure	Revenue falls 10%, fixed costs rise 10%, and variable expenses rise to 24.5%.	$69,300	$44,600 gap	This is the cleanest stress case for a delayed break-even.

What should you verify before locking in the platform build and payroll for a digital download store?

Founder checklist

Test traffic, pricing, and repeat orders before you lock in the platform build, payroll, and paid marketing. This model does not reach breakeven until Month 26, and cash bottoms at $118,000 in Month 25.

1Traffic proof$60K / $15 CAC

Confirm you can hold CAC near $15 before scaling the Year 1 $60,000 marketing budget, or acquisition cost will outrun demand.

2Basket value$71.76 AOV

Test the mix across $89 plugins, $59 themes, $35 video LUTs, and $25 templates so blended Year 1 order value lands near $71.76.

3Contribution80.5% CM

Verify hosting, DRM, payment fees, and affiliate commissions stay near 19.5% of sales, because the model needs an 80.5% contribution margin to fund fixed costs.

4Repeat demand15% / 0.15

Check that repeat customers equal 15.0% of new buyers and order 0.15 times per month, or the lifetime value math will not support the spend.

5Fixed burn$8.6K + $407.5K

Review the $8,600 monthly non-payroll fixed costs and $407,500 Year 1 payroll so you know the burn before you add more staff.

6Cash reserve$118K Month 25

Hold back from committing the full $175,000 of capex until demand is proven, because the cash low point is $118,000 in Month 25.