Last-Mile Delivery Break-Even: About $162K Monthly Revenue Needed

Fixed costs $10.2K/mo Core overhead

Contribution margin 83.5% After variable costs

Break-even revenue $12.2K/mo Revenue target

Break-even timing Month 4 Model crossover

Break-even calculator

Test whether monthly delivery revenue covers courier payouts, processing fees, and the fixed cost base.

Lean Base Full

Monthly revenue Revenue is the pool that pays direct costs and overhead. $ Lower revenue Higher revenue Variable expenses Use costs that rise with delivery volume, like courier payouts and payment fees. $ Lower direct costs Higher direct costs

Money available to cover fixed costs $260,000 $320,000 revenue - $60,000 variable expenses

Margin ratio

81%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly cost base the margin must cover. $ Lower overhead Higher overhead

Break-even chart Revenue Total costs

Which last-mile delivery expenses are fixed, and which move with sales?

Cost classification

Break-even is only useful if each expense lands in the right bucket. Treat courier payouts, usage fees, or stepped payroll as fixed, and you’ll overstate route profit even though the model reaches break-even in Month 4.

Expense	Cost	Break-Even Treatment	Common Mistake
Office Rent	Fixed	Use $5,000 per month in the break-even base.	Allocating rent to each route as if it rises with orders.
Legal & Accounting Services	Fixed	Use $1,500 per month as recurring overhead.	Dropping it below the contribution line and hiding overhead.
Payroll	Semi-fixed	Use $83,750 per month in the first operating year, then step up as full-time headcount grows.	Spreading payroll per delivery and missing hiring cliffs.
Annual Marketing Budget	Semi-fixed	Model planned spend as budget blocks, such as $450,000 in the fourth year.	Treating all marketing as a pure per-order acquisition fee.
Courier Payouts and Incentives	Variable	Apply 15.0% of revenue in the first year, declining to 12.0% in the fifth year.	Treating driver payouts, fuel, and reattempt work as fixed overhead.
Transaction Processing Fees	Variable	Apply 1.5% of revenue in the first year, declining to 1.1% in the fifth year.	Forgetting that payment fees rise with order volume.
Cloud Hosting for Delivery Platform	Semi-variable	Use 1.5% of revenue in the first year, tapering to 1.0% as scale improves.	Booking hosting as flat software when usage rises with demand.
Core Delivery Software Licensing	Semi-variable	Use 1.0% of revenue in the first year, tapering to 0.6% by the fifth year.	Ignoring usage-linked platform fees in contribution margin.

How does break-even shift from a lean route build to a base case and full-volume last-mile load?

Scenario table

Here’s the quick math: the contribution margin stays near 81%, so fixed overhead drives the result. Lean stays below break-even, base lands at break-even, and full volume adds a small cushion.

Planning assumptions only; actual break-even can move with route density, pricing, and cost mix.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean route build	$1,217K	$231K	$1,315K	81%	-$329K	Still short of fixed-cost coverage.
Base delivery plan	$1,623K	$308K	$1,315K	81%	$0K	Covers overhead and reaches break-even.
Full-volume delivery plan	$2,029K	$385K	$1,315K	81%	$329K	Creates a modest cushion above break-even.

What breaks the break-even plan for this last-mile delivery business?

Stress test

At $1.623M revenue, $308K variable expenses, and $1.315M contribution, the plan only breaks even on paper. A 10% revenue miss, higher courier incentives, or a 10% fixed-cost rise quickly pushes it into loss.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$1,623K	$0 cushion	The model is at break-even, so there is no room for slippage.
Revenue shortfall	Revenue falls 10% to $1,461K.	$1,623K	$162K gap	A small demand miss turns the plan into a loss.
Fixed-cost increase	Fixed overhead rises 10% to $1,446K.	$1,754K	$131K gap	Extra overhead eats the cushion fast.
Margin pressure	Variable expenses rise from 190% to 240%.	$1,704K	$81K gap	Higher courier payouts and reattempts cut straight into contribution.
Combined pressure	Revenue falls 10%, variable expenses rise to 240%, and fixed costs rise 10%.	$1,797K	$336K gap	Thin routes, incentive creep, and hiring ahead of density can move the business off break-even fast.

What should you verify before you sign leases or hire drivers for a last-mile delivery service?

Founder checklist

Prove signed seller volume, buyer demand, and route density before you add fixed overhead. With Year 1 buyer CAC at $15, seller CAC at $250, monthly fixed load near $94K, and Month 4 break-even, this only works if orders show up fast enough.

1Signed volumeMonth 4

Do not sign a lease or lock staff in until you have signed seller volume that can carry you to break-even by Month 4.

2Buyer CAC$15

Test paid buyer demand at the Year 1 CAC of $15, because weak acquisition makes the first routes too thin.

3Seller CAC$250

Confirm seller acquisition stays near $250 per account, or the top line will not cover the go-to-market spend.

4Order yield$7.96/order

Use the Year 1 mix to prove each order brings about $7.96 in commission before subscriptions, so you know what one stop really earns.

5Route density$93.9K/mo

Map dispatch and driver coverage before onboarding, because sparse routes will not support the roughly $93.9K of monthly fixed cost.

6Cash floor$680K

Keep at least $680K of cash through the opening month, since startup capex is $285K and payback is not modeled until Month 8.