E-Commerce Break-Even Analysis: About $96K Monthly Revenue

Fixed costs $53.4K/mo Recurring overhead

Contribution margin 83% After variable costs

Break-even revenue $64.4K/mo Monthly target

Break-even timing Month 26 Model turn point

Break-even calculator

Test whether monthly revenue covers direct costs and fixed overhead in each case.

Lean Base Full

Monthly revenue This is the sales line that funds fixed overhead after direct costs. $ Low sales High sales Variable expenses These are product, shipping, and payment costs that rise with sales. $ Low direct cost High direct cost

Money available to cover fixed costs $71,740 $85,000 revenue - $13,260 variable expenses

Margin ratio

84%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead base, including payroll and other fixed spend. $ Lean overhead Heavy overhead

Break-even chart Revenue Total costs

Which expenses are fixed and which move with sales in this online store?

Cost classification

Break-even is only reliable if fixed costs stay fixed and sales-linked costs move with revenue. Here, recurring overhead sets the monthly hurdle, while product, partner, shipping, and payment fees reduce contribution margin.

Expense	Cost	Break-Even Treatment	Common Mistake
E-commerce Platform Fees	Fixed	Include $2,000 per month in the fixed-cost base from Month 1 through Month 60.	Treating the platform fee as order-linked and understating the sales needed to break even.
Software Subscriptions	Fixed	Include $800 per month as recurring overhead within the relevant planning range.	Leaving subscriptions out because each tool feels small on its own.
Office Rent	Fixed	Include $1,000 per month as a stable facility charge until space needs change.	Spreading rent across units and making break-even look better at low volume.
Business Insurance	Fixed	Include $250 per month in fixed operating expenses.	Excluding insurance because it does not touch order fulfillment.
Product Acquisition Cost	Variable	Deduct as a revenue-linked charge: 10.0% in the first year, falling to 8.0% in Year 5.	Using gross sales as contribution before subtracting product acquisition.
Brand Partner Fees	Variable	Deduct as a sales-linked fee: 2.0% in the first year, falling to 1.5% in Year 5.	Putting partner fees below break-even and overstating margin per order.
Fulfillment & Shipping Fees	Variable	Deduct as order-volume expense: 3.0% of revenue in the first year, falling to 2.5% in Year 5.	Treating shipping like overhead even though it rises with orders.
E-commerce Operations Specialist	Semi-fixed	Model as staffing that steps up from 1.0 FTE in the first year to 3.0 FTE in Year 5 as order load grows.	Adding tiny fractional hires each month instead of capacity steps tied to workload.

How does break-even change as this e-commerce business moves from lean to base to full scale?

Scenario table

Break-even gets easier as revenue rises, but the fixed cost base rises fast too. Here’s the quick math: higher sales help, yet payroll and marketing still leave a tight cushion in the lean and base setups.

Planning assumptions only; actual break-even will move with mix, CAC, and payroll.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch	$95,700	$42,283	$53,417	55.8%	$0	Very tight; Month 26 break-even leaves little room for CAC or shipping spikes.
Base case	$86,000	$24,250	$61,750	71.8%	$0	Near break-even; the Month 26 signal means marketing waste still matters.
Full scale	$88,300	$18,217	$70,083	79.4%	$0	Best cushion; Year 3 is the first positive EBITDA year, so break-even risk drops.

What pushes this e-commerce store below break-even?

Stress test

The model breaks if monthly sales slip to $80,000 or if shipping, returns, or customer acquisition cost push variable costs up. At the current 55.8% contribution margin and $53,417 of fixed costs, break-even sits near $95,700 a month.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	Baseline assumptions hold.	$95,700	$0 gap	Zero cushion means any miss turns the month negative.
Revenue shortfall	Monthly sales drop to $80,000.	$95,700	$8,800 gap	A sales drop to $80,000 puts the store below break-even.
Fixed-cost increase	Monthly overhead rises by $10,000.	$113,700	$18,000 gap	Extra overhead alone adds a big new breakeven hurdle.
Margin pressure	Variable burden rises from 44.2% to 49.2% of revenue.	$105,200	$9,500 gap	Higher shipping or returns eat most of the margin cushion.
Combined pressure	Sales stay at $80,000, overhead rises by $10,000, and variable burden reaches 49.2% of revenue.	$124,800	$22,800 gap	Sales miss plus cost creep creates a deep monthly loss.

Can this e-commerce launch clear break-even before you commit to inventory, hiring, and ad spend?

Founder checklist

Test the model before you place the first inventory order or lock permanent hires. If weighted Year 1 AOV, CAC, repeat buying, and fixed payroll miss plan, Month 26 break-even slips and the Month 25 cash trough gets deeper.

1Inventory Terms$25K

Verify supplier terms and the weighted Year 1 AOV near $74.25 before the initial inventory buy, because weak basket value or bad terms will trap cash fast.

2CAC Ceiling$40

Keep customer acquisition cost near $40, or paid growth will outrun the margin the store needs to break even.

3Repeat Loop25% / 8 mo

Check that first-year repeat customers stay at 25% of new buyers, with an 8-month lifetime and 0.4 monthly orders, so repeat demand can carry the model after the first sale.

4Unit Margin83% CM

Confirm product acquisition, partner fees, shipping, and payment costs stay near 17% of revenue, which leaves about 83% contribution before payroll and rent.

5Fixed Load$53.4K/mo

Hold monthly fixed costs near $53.4K, because that is the base burn the store must cover before ad spend starts to scale.

6Cash Trough-$215K

Do not lock permanent hires until the Month 25 cash trough of about negative $215K is funded and Month 26 break-even is still realistic.