Dropshipping Break-Even Analysis: ~$234K Monthly Revenue

Fixed costs $12.1K/mo Monthly overhead

Contribution margin 81% After variable costs

Break-even revenue $14.9K/mo Revenue needed

Break-even timing Month 15 Model break-even

Break-even calculator

Test how monthly revenue, variable expenses, and fixed costs shape break-even for a dropshipping store.

Lean Base Full

Monthly revenue Revenue must cover direct costs first, then fixed overhead. $ Low sales High sales Variable expenses Use product, shipping, and payment costs that rise with sales. $ Low costs High costs

Money available to cover fixed costs $18,837 $23,000 revenue - $4,163 variable expenses

Margin ratio

82%

Covers fixed costs

Yes

Fixed monthly costs Use monthly overhead that stays in place even if sales slow. $ Lean overhead Heavy overhead

Break-even chart Revenue Total costs

Which dropshipping expenses are fixed, and which move with sales?

Cost classification

Break-even gets shaky when fixed tools, ad spend, and per-sale fees are mixed together. In the first year, monthly fixed software and retainers are $1,059 before labor, while product, shipping, and payment fees move with revenue.

Expense	Cost	Break-Even Treatment	Common Mistake
E-commerce Platform Subscription	Fixed	Use $299 per month from Month 1 through Month 60 as monthly overhead.	Treating the subscription as a per-order charge.
Marketing Automation Software	Fixed	Use $150 per month as overhead before calculating order volume needed to break even.	Leaving it out because it feels small.
Legal & Accounting Retainer	Fixed	Use $300 per month as recurring operating overhead.	Classing it as one-time setup work.
Wholesale Product Cost	Variable	Reduce contribution margin by 12.0% of revenue in the first year.	Using gross sales as margin before supplier product charges.
Supplier Shipping Fees	Variable	Reduce contribution margin by 3.0% of revenue in the first year.	Putting shipping below operating profit instead of against each sale.
E-commerce Platform Transaction Fees	Variable	Reduce contribution margin by 2.5% of revenue in the first year.	Counting platform fees as fixed software overhead.
Paid Advertising	Semi-variable	Model the first-year $25,000 budget and $25 CAC together, so spend scales with customer acquisition.	Using the full budget without checking customers acquired.
Customer Support Specialist	Semi-fixed	Use 0.5 FTE at a $45,000 salary in the first year, then step up as support volume grows.	Modeling support as perfectly variable per order.

How does break-even change across lean, base, and full-scale dropshipping scenarios?

Scenario table

Lean stays cash-tight because traffic is small and fixed payroll still bites. Base gets close to break-even around Month 15, while full scale only works if CAC keeps falling and repeat buying fills the gap.

Planning figures only; the one-time $28K startup spend sits outside monthly break-even.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch test	$8K	$5K	$12K	38%	-$9K	Still below cost cover; CAC pressure is high.
Base break-even case	$234K	$112K	$121K	52%	$1K	Near break-even, with the model signaling Month 15.
Full-scale growth case	$450K	$203K	$161K	55%	$86K	CAC near $20 and repeat buying create a real cushion.

What breaks first if sales slow or costs climb?

Stress test

The plan is tightest on revenue miss and cost creep before Month 15. A 20% sales miss creates about $24K of monthly pressure, and higher fixed or variable costs can push break-even to $257K to $259K.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$234K	$0 cushion	Breakeven lands by Month 15, so slack is thin.
Revenue shortfall	Revenue runs at 80% of the break-even target.	$234K	$24K operating gap	A modest sales miss can turn into monthly cash pressure fast.
Fixed-cost pressure	Fixed overhead rises 10% before the store has cushion.	$257K	$23K gap	More overhead means the store needs more sales just to stand still.
Margin pressure	Non-ad variable expenses rise from 190% to 240%.	$259K	$25K gap	Supplier, shipping, and fee creep can erase the break-even cushion.
Combined pressure	Revenue drops to 80% of target and non-ad variable expenses rise to 240%.	$259K	$72K gap	CAC above $25, supplier shipping spikes, and refunds can drain cash before Month 15.

Can this dropshipping store clear break-even before you scale paid ads?

Founder checklist

Only scale once test orders show about $85 AOV, $25 CAC, and margins that can cover the $1,059 monthly software stack and lean payroll. If those numbers miss, the store will burn cash before Month 15 break-even shows up.

1AOV Check$85

Test orders should land near $85 average order value before you scale ads, since each cart needs enough room to absorb fees.

2CAC Cap$25

Keep customer acquisition cost at or below $25 in the first paid tests, or new customers will cost too much for the margin to hold.

3Unit Margin81%

Verify product cost, supplier shipping, transaction fees, and payment fees stay near 19% of revenue, which leaves about 81% contribution before fixed costs.

4Fixed Stack$1,059/mo

Hold the software stack at $1,059 per month and stay off annual contracts until Month 15 break-even evidence shows the base load is safe.

5Team Ramp1.0/0.5/0.5 FTE

Keep payroll at the founder, 0.5 marketing FTE, and 0.5 support FTE until order volume can fund the next hire without squeezing cash.

6Cash Floor$808K

Keep at least $808K cash by Month 18, and ring-fence the $28K launch spend so setup costs do not eat the runway.