Break-Even Analysis For A Makeup Line: $805K Monthly Revenue

Fixed costs $7.7K/mo Fixed base

Contribution margin 80.5% After variable costs

Break-even revenue $9.5K/mo Monthly target

Break-even timing Month 15 Ramp to break-even

Break-even calculator

Use this calculator to test monthly revenue, variable expenses, and fixed costs against break-even for a cosmetics line.

Lean Base Full

Monthly revenue Higher sales create more margin to cover fixed costs. $ Lower sales Higher sales Variable expenses These are direct costs that rise with each sale, like product, packaging, shipping, and fees. $ Lower costs Higher costs

Money available to cover fixed costs $24,150 $30,000 revenue - $5,850 variable expenses

Margin ratio

80%

Covers fixed costs

$19,850 short

Fixed monthly costs This is the monthly cost base that contribution margin has to cover. $ Lower overhead Higher overhead

Break-even chart Revenue Total costs

Which expenses stay fixed and which move with sales in this cosmetics business?

Cost classification

Break-even gets reliable only when per-sale costs are separated from monthly overhead. Here, first-year variable load starts at 19.5% of revenue before payroll, fixed fees, and marketing, so misclassifying one line can move Month 15 break-even.

Expense	Cost	Break-Even Treatment	Common Mistake
Raw Materials & Manufacturing	Variable	Model as 10.0% of revenue in the first year, falling to 8.0% by Year 5.	Treating product margin as fixed when it moves with every unit sold.
Packaging Costs	Variable	Use 3.0% of revenue in the first year, declining to 2.0% by Year 5.	Rolling packaging into overhead instead of per-order gross margin.
Fulfillment & Shipping	Variable	Apply 5.0% of revenue in the first year, then improve to 4.0% by Year 5.	Using one flat warehouse number and missing shipping drag.
E-commerce Transaction Fees	Variable	Include 1.5% of revenue in the first year, dropping to 1.0% by Year 5.	Forgetting card and checkout fees in contribution margin.
E-commerce Platform Fees	Fixed	Carry $3,000 per month from Month 1 through Month 60.	Scaling it with sales when the model gives a monthly fee.
Warehousing Fixed Fee	Semi-fixed	Use the $4,000 monthly baseline, then revisit when volume needs more capacity.	Assuming storage grows smoothly with each order.
Annual Marketing Budget	Semi-variable	Plan $250,000 in the first year, tied to a $35 customer acquisition cost.	Treating all marketing as fixed even though spend drives new orders.
Salaries	Semi-fixed	Model staffing by full-time equivalent steps, since headcount rises by role and year.	Treating launch staffing as fully variable with revenue.

How does break-even change from a lean launch to a full-scale makeup line?

Scenario table

The lean case breaks even at about $805k a month, the base case at about $1,117k, and the full case at about $1,623k. Margins improve a bit, but higher fixed payroll and marketing push the bar up.

Planning assumptions only; actual break-even will move with product mix, ad costs, freight, and sell-through.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Year 1 lean launch	$805k	$157k	$648k	80.5%	$0	Good for a cautious launch, but the first $75k inventory buy keeps cash tight.
Year 2 base growth	$1,117k	$207k	$910k	81.5%	$0	Best fit for planned repeat-customer growth, but overhead still needs tight control.
Year 3 full scale	$1,623k	$281k	$1,342k	82.7%	$0	Works only if higher marketing and staffing costs are matched by steady demand.

What breaks the makeup line break-even plan first?

Stress test

The plan is most exposed to small revenue misses, rising overhead, and higher product costs. A $10,000 monthly overhead bump or a 1-point margin slip lifts the break-even bar fast, and weak CAC or slower repeat buying makes the gap harder to close.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$805,000	$0 gap	The base plan clears break-even only at target.
Revenue shortfall	Revenue lands $10,000 below the Year 1 target.	$886,000	$81,000 gap	A small miss widens the break-even hole fast.
Fixed-cost increase	Monthly overhead rises by $10,000.	$929,000	$124,000 gap	Extra fixed cost pushes the hurdle up fast.
Margin pressure	Packaging and manufacturing costs rise by 1 percentage point.	$815,000	$10,000 gap	Small cost creep lifts the break-even bar.
Combined pressure	Monthly overhead rises by $10,000 and margin slips 1 point.	$1,131,000	$326,000 gap	CAC above $35, slow repeat orders, and markdowns can break the plan.

Is the first production order ready if Year 1 economics and cash still clear break-even?

Founder checklist

Before you place the first production order, test the model against Year 1 economics and cash. The plan only works if the $35 CAC, about $55.38 AOV, 80.5% contribution margin, and the $350k Month 14 cash floor all hold together.

1Unit Margin80.5% CM

Verify the Year 1 mix still leaves about 80.5% contribution after 13.0% manufacturing and packaging cost plus 6.5% shipping and fee load, or the fixed base will outrun sales.

2Order Value$55.38

Confirm the blended order value lands near $55.38 with 1.25 units per order, because that is the sale size the CAC math depends on.

3CAC Target$35

Keep Year 1 CAC around $35 under the $250k marketing budget, or each new customer will take too long to pay back.

4Launch Build$160K

Approve the $75k inventory buy, $25k packaging and molds, $40k website build, $12k testing gear, and $8k warehouse setup only after label and launch checks are done.

5Fixed Load$43.9K/mo

Verify monthly fixed load sits near $43.9k, using $11.65k in operating fees plus about $32.3k in Year 1 payroll, before adding the next role.

6Cash RunwayMonth 14

Keep cash above the $350k minimum in Month 14, since breakeven lands in Month 15 and payback takes 28 months.