Online Clothing Store Break-Even Analysis: $266K Monthly Revenue

Fixed costs $4.7K/mo Base overhead

Contribution margin 86% After variable costs

Break-even revenue $5.5K/mo Sales target

Break-even timing Month 21 Launch month

Break-even calculator

Use this calculator to test whether monthly revenue covers variable expenses and fixed monthly costs.

Lean Base Full

Monthly revenue Revenue is the cash pool that has to cover direct costs and overhead. $ Lower sales Higher sales Variable expenses Include wholesale cost, shipping, and payment fees that rise with sales. $ Lower costs Higher costs

Money available to cover fixed costs $51,900 $60,000 revenue - $8,100 variable expenses

Margin ratio

86%

Covers fixed costs

Yes

Fixed monthly costs Include the monthly cost base the store must cover before profit starts. $ Lean setup Scaled team

Break-even chart Revenue Total costs

Which expenses are fixed and which move with sales for an online apparel store?

Cost classification

Your break-even is only as good as the cost labels behind it. Treat fixed overhead, order-linked fees, marketing spend, and hiring steps correctly so the Month 21 breakeven target stays realistic.

Expense	Cost	Break-Even Treatment	Common Mistake
E-commerce platform fees, $1,500 per month	Fixed	Include the full monthly amount before calculating contribution margin.	Spreading it per order and hiding true base overhead.
Software subscriptions for analytics and customer management, $800 per month	Fixed	Model as monthly overhead during the full planning range.	Letting subscription creep sit outside break-even math.
Wholesale cost of apparel, 5.0% of first-year revenue	Variable	Deduct as a revenue-linked cost before contribution margin.	Treating inventory replenishment as fixed overhead.
Wholesale cost of accessories, 3.0% of first-year revenue	Variable	Apply the percentage to accessory sales as volume scales.	Using one blended product margin without checking mix.
Fulfillment and shipping, 7.0% of first-year revenue	Variable	Deduct per order because it rises with sales volume.	Budgeting shipping as flat even when orders grow.
Payment processing fees, 3.0% of first-year revenue	Variable	Subtract from each sale before fixed overhead coverage.	Counting gross sales as cash available for overhead.
Annual marketing budget, $50,000 in the first year	Semi-fixed	Plan as a controlled spend block, then test orders at $40 customer acquisition cost.	Double counting the budget and customer acquisition cost.
Hiring steps for added roles from Month 13 and Month 25	Semi-fixed	Add payroll in steps when headcount expands operating capacity.	Modeling new hires as smooth monthly variable expense.

How does break-even change from a lean launch to a full online clothing store?

Scenario table

Break-even climbs as marketing goes from $50k to $150k to $300k a year and headcount expands from founder-led support to merchandising, customer service, and operations. Return-rate pressure isn’t modeled here because no return rate was provided.

Planning numbers only: these are modeled assumptions, not guarantees, and actual break-even can move with traffic, returns, and shipping costs.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch	$266k	$47.9k	$218k	82.0%	$0	Tight cushion; a small sales miss turns negative fast.
Base launch	$453k	$78.9k	$374k	82.6%	$0	This is the pivot point; stay close to plan to avoid red ink.
Full launch	$680k	$114.2k	$566k	83.2%	$0	Higher volume is needed, but the margin still supports scale.

What breaks this break-even plan first?

Stress test

At the baseline 82% contribution margin, break-even is about $266k. A 15% revenue drop, a 10% fixed-cost jump, or a 5-point margin slip each pushes the floor higher; the combo case is the real cash risk.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$266k	$0 gap	No cushion; any slip hits cash fast.
Revenue shortfall	Revenue falls 15% from plan.	$266k	$33k gap	CAC above $40 makes the gap harder to close.
Fixed-cost increase	Fixed costs rise 10%.	$292k	$26k gap	Added payroll or tools raise the floor.
Margin pressure	Contribution margin falls to 77%.	$283k	$17k gap	Shipping above 70%, discounting, or returns squeeze margin.
Combined pressure	Revenue falls 15%, fixed costs rise 10%, and margin falls to 77%.	$332k	$66k gap	Those drags together can flip the model negative.

Can this online clothing store survive the ramp before you lock in ads, inventory, and hires?

Founder checklist

Yes, but only if the first-order basket holds near $63.53, CAC stays at $40 or less, and cash can carry the loss period. The model reaches break-even in Month 21, but it still needs about $620k of minimum cash by Month 23.

1AOV Test$63.53

Confirm the basket can reach about $63.53 per order before you scale ads, because that is the demand proof the model uses to make CAC work.

2CAC Cap$40 CAC

Keep CAC at $40 or less and treat the $50k Year 1 marketing budget as test spend, not a free pass to buy unproven traffic.

3Margin Check85.4% CM

Verify variable costs stay near 14.6% of revenue, which leaves about 85.4% contribution margin before fixed overhead.

4Fixed Load$17.6k/mo

Hold monthly fixed costs near $17.6k at launch, and treat the $63k of startup outlays as separate from the monthly break-even run rate.

5Hiring RampFounder + 0.5 FTE

Stay at founder plus 0.5 marketing FTE until order volume can support the Month 13 merch and service hires, and test return handling before promising free returns.

6Cash RunwayMonth 21

Use Month 21 break-even and 32-month payback as the expansion gate, and make sure cash can cover the model's $620k minimum shown in Month 23.