Oilfield Supply Break-Even Analysis: $128K Monthly Sales Target

Fixed costs $36.3K/mo Monthly overhead

Contribution margin 80% Before fixed costs

Break-even revenue $45.4K/mo Revenue floor

Break-even timing Month 14 Model cross-over

Break-even calculator

Use this calculator to test monthly revenue, variable expenses, and fixed costs against break-even for an oilfield supply business.

Lean Base Full

Monthly revenue Revenue is the cash in before fixed overhead. $ Lower sales Higher sales Variable expenses Use costs that move with sales, like product, freight, and commissions. $ Lower spend Higher spend

Money available to cover fixed costs $194,890 $241,500 revenue - $46,610 variable expenses

Margin ratio

81%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly overhead break-even has to cover. $ Lower overhead Higher overhead

Break-even chart Revenue Total costs

Which expenses are fixed and which move with sales in an oilfield supply business?

Cost classification

Break-even gets cleaner when product acquisition, freight, logistics, and commissions flex with sales, while $36,300/month of listed overhead stays fixed. Delivery and warehouse labor step up by headcount, so model it in hiring bands.

Expense	Cost	Break-Even Treatment	Common Mistake
Warehousing Lease	Fixed	Include $20,000/month as baseline overhead from Month 1 through Month 60.	Treating rent as a percent of revenue.
Utilities & Insurance	Fixed	Include $2,500/month in fixed overhead for the planning range.	Letting it scale with unit volume without data.
Proprietary Software Maintenance	Fixed	Include $5,000/month as a recurring system support expense.	Mixing maintenance with one-time system development spend.
Direct Product Acquisition	Variable	Apply 13.0% of first-year revenue, then use the forecast rate by year.	Treating inventory purchases as fixed overhead.
Inbound Freight & Handling	Variable	Apply 2.0% of first-year revenue because freight moves with product flow.	Ignoring freight exposure when sales volume rises.
Logistics & Transportation	Variable	Apply 3.0% of first-year revenue for delivery activity tied to sales.	Modeling all transportation as fleet overhead only.
Sales Commissions	Variable	Apply 2.0% of revenue because commissions move directly with closed sales.	Counting commissions before the related sale occurs.
Delivery Drivers and Warehouse Staff	Semi-fixed	Model headcount in steps as FTE rises from 2.0 to 6.0 by year.	Treating labor as a smooth percent of revenue.

How does break-even change from a lean launch to base and full oilfield supply cases?

Scenario table

Lean keeps the launch close to break-even, base turns repeat demand into a small monthly cushion, and full only works when inventory turns fast and delivery coverage stays tight. Higher fixed costs push the break-even bar up, so volume quality matters.

Planning assumptions only; actual break-even will move with product mix, freight, and sales pace.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean oilfield supply launch	$100,000	$20,000	$102,550	80.0%	-$22,550	Still near the line; good for proof, not comfort.
Repeat-demand base case	$241,500	$46,580	$119,633	80.7%	$75,288	Covers fixed cost with a modest cushion if repeat orders hold.
Full inventory-and-delivery case	$750,400	$129,069	$149,633	82.8%	$471,698	Strong cushion, but only with fast turns and delivery coverage.

What pushes this oilfield supply plan below break-even?

Stress test

The plan starts below break-even at $100,000 monthly revenue versus about $128,200 needed. A 10% sales slip, a 3-point margin hit, or a 10% fixed-cost jump all widen the loss fast.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$128,200	$28,200 gap	Launch revenue sits below break-even, so cash burn starts immediately.
Revenue shortfall	Monthly revenue drops 10% to $90,000.	$128,200	$38,200 gap	A modest sales slip turns the month into about a $30,600 operating loss.
Fixed-cost pressure	Fixed monthly costs rise 10% to $112,805.	$141,000	$41,000 gap	More overhead pushes the break-even bar higher before sales can catch up.
Margin pressure	Variable expense pressure rises 3 points, cutting contribution margin to 77%.	$133,200	$33,200 gap	Freight and procurement creep adds a new gap even if sales hold steady.
Combined pressure	Revenue falls 10%, fixed costs rise 10%, and contribution margin drops to 77%.	$146,500	$56,500 gap	Sales, freight, and overhead all move the wrong way, driving about a $43,500 monthly loss.

Can the first-year oilfield supply plan clear break-even before you sign the warehouse lease and buy the fleet?

Founder checklist

Do the math before you lock in the warehouse and fleet. Year 1 break-even is about $128.2K a month, with roughly $102.6K of fixed cost and 80% contribution margin, so if demand can’t clear that, the lease and hiring plan are too early.

1Demand Proof$128.2K/mo

Verify signed orders and pipeline can reach this monthly run rate in the first operating year, because that is the level needed to cover fixed costs and stop cash burn.

2Fixed Load$102.6K/mo

Check the full fixed load, not just rent: Year 1 payroll and overhead run about $102.6K a month, so the $20,000 lease only works if order density is already there.

3Margin Stack80% CM

Confirm supplier pricing, inbound freight, logistics, and commissions still leave this spread, because a few points of margin loss move break-even up fast.

4Fleet Ramp$300K

Only buy the $300,000, three-truck fleet if route volume can keep drivers and warehouse staff busy, because underused capacity adds cost without adding sales.

5Cash Cushion-$303K

Secure working capital for the $200,000 safety stock build and the cash trough, because minimum cash reaches about negative $303,000 before the model turns.

6Launch GateMonth 14

Set credit rules, safety stock, and handling steps before launch month commitments, because break-even does not arrive until Month 14 and weak controls can delay it.