E-Commerce Fulfillment Break-Even Analysis: $288K/Month

Fixed costs $80.5K/mo Base overhead

Contribution margin 70% After variable costs

Break-even revenue $115.5K/mo Monthly target

Break-even timing Month 19 Model breakeven

Break-even calculator

Test monthly revenue against variable costs and fixed overhead to see where this fulfillment model crosses break-even.

Lean Base Full

Monthly revenue Revenue is the pool that must cover variable cost and fixed overhead. $ Low sales High sales Variable expenses Direct costs like packing, shipping, and fees rise with revenue. $ Lean costs Heavy costs

Money available to cover fixed costs $189,000 $270,000 revenue - $81,000 variable expenses

Margin ratio

70%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly cost base the margin must absorb. $ Low overhead High overhead

Break-even chart Revenue Total costs

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

Cost classification

Break-even gets sharper when fixed warehouse overhead is kept separate from order-driven spend. In the first year, fixed rent and software sit in overhead, while materials, carrier spend, and fees move with revenue.

Expense	Cost	Break-Even Treatment	Common Mistake
Warehouse Rent & Facilities	Fixed	Use $45,000 per month in overhead from Month 1 through Month 60.	Treating unused warehouse space as free capacity.
Warehouse Staff Payroll	Semi-fixed	Model first-year staffing at 8 FTE × $45,000, or $360,000 per year.	Modeling every warehouse labor dollar as per-order spend.
Packing Materials & Supplies	Variable	Use 12.0% of revenue in the first year, declining to 10.0% by the fifth year.	Burying packing supplies inside rent or overhead.
Shipping & Carrier Costs	Variable	Use 8.0% of revenue in the first year, declining to 6.0% by the fifth year.	Counting customer-paid postage as margin without the matching expense.
Software Licensing & Technology	Fixed	Use $12,000 per month in overhead unless usage fees are added.	Scaling the full software line with orders by default.
Warehouse Equipment & Maintenance	Variable	Use 4.0% of revenue in the first year, declining to 3.0% by the fifth year.	Treating maintenance like a one-time equipment purchase.
Insurance & Security	Fixed	Use $6,500 per month in fixed operating overhead.	Entering $65,000 per month instead of $6,500.
Payment Processing Fees	Variable	Use 2.8% of revenue in the first year, declining to 2.4% by the fifth year.	Leaving card fees out of contribution margin.

How does break-even change from lean launch to full utilization in e-commerce fulfillment?

Scenario table

As revenue climbs, the fixed warehouse and payroll load gets covered faster, so the business moves from loss to break-even to a small profit. Here’s the quick math: keep variable costs near 30% and the model clears fixed costs.

Planning assumptions only; actual results will shift with order mix, labor productivity, and carrier pass-throughs.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch	$2.2M	$667k	$2.005M	69.7%	-$472k	Still below break-even; cash burn stays high.
Base break-even	$2.88M	$873k	$2.005M	69.7%	$2k	Right at break-even; any slippage turns it negative.
Full utilization	$3.5M	$1.061M	$2.005M	69.7%	$434k	Creates a cushion; fixed costs are well covered.

What pushes this fulfillment model past break-even?

Stress test

The base plan has only a thin cushion, so small misses matter. A 10% revenue dip, a 10% overhead jump, or a 5-point margin squeeze each widen the loss fast, and the combined case is the real solvency risk.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change from plan.	$2.88M	$3k cushion	Only a few thousand dollars of cushion remain.
Revenue shortfall	Revenue comes in 10% below plan.	$2.88M	$288k gap	Slow client onboarding turns a small cushion into a loss.
Fixed-cost pressure	Fixed costs rise 10% above plan.	$3.16M	$284k gap	Underfilled warehouse space and overhead creep lift the hurdle.
Margin pressure	Variable expense rate rises by 5 points.	$3.10M	$220k gap	Overtime-heavy picking, packaging waste, and carrier surcharges hit margin.
Combined pressure	Revenue falls 10%, fixed costs rise 10%, and variable expense rate rises 5 points.	$3.41M	$817k gap	All three hits together push the plan deep into the red, with loss near $529k.

What should the founder verify before signing the warehouse lease and hiring the first ops team?

Founder checklist

Don't sign the warehouse lease until the sales pipeline can support about $288k in monthly revenue and the team can fund the Month 18 cash trough of -$1.345M. Break-even only shows up in Month 19, so the launch plan has to work before you lock in overhead.

1Revenue Path$288k/mo

Confirm signed demand or a credible pipeline can reach this monthly revenue before you commit to the lease and payroll load.

2Fixed Load$80.5k/mo

Verify the monthly fixed overhead stays at this level, because rent, software, insurance, and admin costs hit cash every month.

3Margin Check69.7% CM

Make sure packing, shipping, equipment, commissions, and payment fees still leave this contribution margin after customer billing and pass-throughs.

4Staffing Ramp8 warehouse FTE

Check that you can staff the opening ramp with eight warehouse roles plus managers, sales, support, finance, quality, and software support.

5Cash CushionMonth 18

Hold enough cash to absorb the Month 18 low of -$1.345M, since payback takes 40 months and the business burns hard before breakeven.

6Launch CAC$450 CAC

Test the first-year sales ramp with the $180k marketing budget and this acquisition cost, or customer growth may miss the break-even path.