Online Auction House Break-Even Analysis: ~$88K Monthly Revenue

Fixed costs $52.8K/mo Year 1 base

Contribution margin 88.5% After variable costs

Break-even revenue $59.7K/mo Revenue target

Break-even timing Month 16 Model crossing

Break-even calculator

Test monthly revenue against variable expenses and fixed monthly costs to see when the auction platform covers its overhead.

Lean Base Full

Monthly revenue Revenue is the pool that covers direct costs and overhead. $ Low volume High volume Variable expenses These rise with each sale, like payment, ad, and verification costs. $ Low costs High costs

Money available to cover fixed costs $53,700 $60,000 revenue - $6,300 variable expenses

Margin ratio

90%

Covers fixed costs

$6,300 short

Fixed monthly costs This is the monthly cost base the platform must cover before profit. $ Low overhead High overhead

Break-even chart Revenue Total costs

Which auction marketplace expenses are fixed, and which move with sales?

Cost classification

Break-even is only useful when fixed overhead is separated from order-linked fees and step hires. Here, $12,000/month of fixed overhead behaves very differently from payment, dispute, authentication, and acquisition spend.

Expense	Cost	Break-Even Treatment	Common Mistake
Server Hosting & CDN	Fixed	Include $3,000/month in fixed overhead from Month 1 through Month 60.	Scaling hosting too early before order volume proves the need.
Platform Maintenance & Security	Fixed	Include $2,500/month in fixed overhead for the planning range.	Treating core security as optional when trust drives bidding activity.
Office Rent	Fixed	Include $2,000/month in monthly overhead regardless of GMV or order count.	Adding rent expansion before seller and buyer density supports it.
Payroll	Semi-fixed	Model payroll in hiring steps; Year 1 payroll is about $40.8k/month and rises with support, engineering, operations, and marketing FTEs.	Treating support, fraud review, and operations workload as fully fixed.
Payment Gateway Fees	Variable	Apply as a percentage of processed volume, starting at 3.0% in the first year and declining to 2.4% by the mature year.	Putting payment fees below the line instead of reducing contribution margin.
Dispute Resolution & Insurance	Variable	Apply against transaction activity, from 1.5% in the first year to 1.0% by the mature year.	Ignoring that more orders create more claims, refunds, and review work.
Third-Party Authentication Fees	Variable	Apply to volume-sensitive transactions, from 2.0% in the first year to 1.5% by the mature year.	Assuming authentication stays flat while higher-value listings grow.
Digital Advertising and Acquisition Budgets	Semi-variable	Model digital advertising at 5.0% in the first year, falling to 4.0%, plus annual seller and buyer acquisition budgets.	Treating acquisition spend as fixed overhead when growth targets drive it.

How does break-even change across lean, base, and full operating cases for this marketplace?

Scenario table

More payroll and acquisition spend lift the break-even bar. Here’s the quick math: lean needs about $60k a month, base about $88k, and full about $145k.

Planning assumptions only; actual break-even will move with mix, fees, and conversion.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch case	$59.7k	$6.9k	$52.8k	88.5%	$0	Lowest revenue bar; margin slack is thin.
Base marketplace ramp	$87.9k	$10.1k	$77.8k	88.5%	$0	Tracks the Month 16 break-even signal.
Full acquisition scale	$145.3k	$15.8k	$129.5k	89.1%	$0	Highest bar; only works with efficient scale.

What breaks the break-even plan for an online auction house?

Stress test

Base case needs about $88k a month to break even at an 88.5% contribution margin. The main risks are weak sell-through, rising seller and buyer CAC, and fee pressure; if revenue slips or overhead grows, Month 16 breakeven can push out fast.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$88k/mo	$0 cushion	It works, but the cushion is thin.
Revenue shortfall	Monthly completed sales run $10k below plan.	$99k/mo	$11k gap	A small miss on completed sales quickly eats the cushion.
Fixed-cost increase	Monthly overhead rises by $10k.	$99k/mo	$11k gap	Every extra $10k of overhead needs roughly $11k more revenue.
Margin pressure	Variable expenses rise from 11.5% to 15.0% of revenue.	$92k/mo	$4k gap	Higher ad, gateway, auth, and dispute costs lift the break-even line.
Combined pressure	Revenue misses plan by $10k, overhead rises $10k, and variable expenses rise to 15.0%.	$111k/mo	$23k gap	This is where Month 16 breakeven slips and cash can tighten near Month 15.

Can this auction marketplace prove supply, demand, and payments before you scale ads and hires?

Founder checklist

Don’t scale paid launch until sellers, buyers, and payments all work in one loop. The model reaches breakeven in Month 16, needs $244K minimum cash, and starts Year 1 at -$368K EBITDA, so the first spend has to prove a path toward about $88K in monthly revenue.

1Seller Supply$200 CAC

Confirm you can recruit enough sellers at the Year 1 acquisition cost before scaling buyer ads, because empty auctions kill repeat buying and slow the whole marketplace.

2Buyer CAC$20 CAC

Map paid buyer acquisition against the Year 1 $20 CAC, and make sure the 70/20/10 buyer mix is real before you spend hard on traffic.

3AOV Mix$50 / $250 / $150

Verify the category mix still clears those order values, because casual shoppers, collectors, and resellers each pull the basket in a different direction.

4Contribution Margin88.5% CM

Test payment flow, dispute handling, and insurance before volume rises; Year 1 gateway and dispute costs total 4.5% and digital ad plus authentication costs add 7.0%, so the model keeps 88.5% before fixed burn.

5Base Burn$12K/mo

Keep the fixed stack near the model before adding more headcount, because Year 2 only makes sense if the marketing and operations ramp is backed by real auction volume.

6Cash Runway$244K / M16

Hold enough cash to reach Month 15, because breakeven lands in Month 16 and Year 2 spend should wait until monthly revenue is clearly moving toward about $88K.