Fitness Equipment Break-Even: ~$87K in Monthly Revenue

Fixed costs $31.3K/mo Monthly overhead

Contribution margin 83.5% After variable costs

Break-even revenue $37.5K/mo Monthly target

Break-even timing Month 1 Launch month

Break-even calculator

Test monthly revenue, variable expenses, and fixed costs to see where the business breaks even.

Lean Base Full

Monthly revenue Top-line sales set the margin pool available to cover fixed costs. $ Low sales High sales Variable expenses Direct costs here include equipment, inspection, shipping, and fees. $ Low costs High costs

Money available to cover fixed costs $1,419,116 $1,663,677 revenue - $244,561 variable expenses

Margin ratio

85%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly cost base salaries and overhead must cover. $ Lean base Bigger base

Break-even chart Revenue Total costs

Which expenses are fixed and which move with sales in a fitness equipment business?

Cost classification

Break-even is reliable only when sales-linked expenses stay variable and monthly commitments stay fixed. Here’s the quick read: rent and core software set the floor, while equipment, freight, and card fees move with each order.

Expense	Cost	Break-Even Treatment	Common Mistake
Office and Warehouse Rent	Fixed	Include the $3,500 monthly rent in fixed overhead that must be covered before profit.	Tying rent to order volume instead of capacity already leased.
Utilities	Semi-variable	Model the $500 monthly amount as a base load, then stress-test higher usage as warehouse activity rises.	Treating all utilities as fixed when packing, lighting, and equipment use can rise with volume.
E-commerce Platform Fees	Fixed	Include the $1,000 monthly platform fee in the fixed break-even hurdle.	Spreading the fee per order and hiding the monthly cash commitment.
Accounting and Legal Services	Semi-fixed	Start with the $1,500 monthly run rate, then step it up when reporting, contracts, or compliance workload increases.	Assuming professional fees scale smoothly with sales instead of jumping at workload thresholds.
Warehouse Equipment Maintenance	Semi-fixed	Use the $800 monthly amount as a capacity-related expense that can step up as warehouse scale increases.	Leaving maintenance flat even after more equipment, racking, or handling volume is added.
Cost of Equipment	Variable	Apply it as a percentage of sales, starting at 9.5% in the first year and declining to 7.5% by the fifth year.	Treating product purchasing as overhead instead of a direct sales-linked expense.
Shipping and Logistics	Variable	Apply freight as sales volume rises, starting at 3.5% of sales in the first year and improving to 2.7% by the fifth year.	Budgeting freight like rent, even though each shipped order creates handling and delivery expense.
Payment Processing Fees	Variable	Apply card processing as a sales-linked expense, starting at 2.0% of sales and declining to 1.6% by the fifth year.	Grouping payment fees with overhead instead of reducing contribution margin on every sale.

How does break-even change from a lean launch to Year 1 base and Year 4 expansion?

Scenario table

The lean case strips out paid marketing, the base case uses Year 1, and the full case uses Year 4 staffing and ad spend. As overhead rises, the monthly break-even line jumps from the high $30k range to more than $400k.

Planning figures only. These model assumptions are useful for decisions, not guarantees of future break-even.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch case	$37,453	$6,180	$31,283	83.5%	$0	Lower ad spend makes break-even easier, but core payroll still has to clear.
Year 1 base case	$87,400	$14,421	$72,950	83.5%	$0	About 80 monthly orders keep this at the line.
Year 4 expansion case	$408,700	$56,397	$352,325	86.2%	$0	Cheaper accessories raise order pressure, so volume matters more.

What breaks first if sales miss, freight rises, or overhead creeps up?

Stress test

Revenue is the fastest cash risk because fixed costs stay near $72,950 in Year 1. Shipping, payment fees, equipment cost, and quality control leave only about an 83.5% contribution margin, so break-even sits near $87,400.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change in revenue, margin, or overhead.	$87,400	$0 gap	No cushion if launch sales miss.
Revenue shortfall	Revenue comes in 10% below the base plan.	$87,400	$8,700 gap	A small sales miss opens a cash gap fast.
Fixed-cost pressure	Fixed costs rise by $10,000 in Year 1.	$99,300	$11,900 gap	Extra payroll or space spend pushes break-even higher.
Margin pressure	Shipping, returns, and discounting cut contribution margin by 1 point.	$88,400	$1,000 gap	Freight and promo pressure eat the cushion.
Combined pressure	Revenue falls 10%, fixed costs rise $10,000, and margin drops 1 point.	$100,500	$21,900 gap	Slow turns and rising ad spend can break the model.

What should a fitness equipment founder verify before signing the lease and placing the first bulk order?

Founder checklist

Don't sign the lease or place the first bulk order until the mix, CAC, freight flow, and cash need all line up. Year 1 only works if the business can hold a $1,092 AOV, keep CAC near $250, and fund the $699K minimum cash need while staying above about 80 orders a month.

1Demand Proof$1,092 AOV

Verify the first-year basket really lands here, because the 60% treadmill, 30% free weight set, and 10% yoga mat mix only works when each order averages 1.10 units.

2CAC Test$250 CAC

Test paid traffic at this cost before scaling the $500,000 marketing budget, because a small CAC miss gets expensive fast at this spend level.

3Margin Stack83.5% CM

Check that Year 1 variable costs stay at 16.5% of revenue, so the gross contribution still has room to cover freight, payroll, and fixed overhead.

4Fixed Burn$31.3K/mo

Lock down the fixed-cost load from rent, utilities, software, insurance, admin, and base payroll, because that burn sits inside the $699K minimum cash need.

5Stock Flow$150K stock

Confirm supplier fill, warehouse space, heavy-machine shipping, and warranty and return handling before you tie up the first inventory buy.

6Runway Gate$699K min

Make sure launch cash can cover month one inventory and startup spend, and hold the next support and finance hires until orders stay above about 80 a month.