Product Packaging Break-Even: $508K Monthly Sales Target

Fixed costs $41.0K/mo Payroll + overhead

Contribution margin 81% After variable costs

Break-even revenue $50.8K/mo Monthly target

Break-even timing Month 13 Model ramp point

Break-even calculator

Test whether monthly packaging revenue covers direct costs and fixed overhead.

Lean Base Full

Monthly revenue Revenue sets the pool that pays direct costs and overhead. $ Low sales High sales Variable expenses Use monthly costs that move with output, like materials, labor, shipping, and commissions. $ Low direct cost High direct cost

Money available to cover fixed costs $51,500 $60,000 revenue - $8,500 variable expenses

Margin ratio

86%

Covers fixed costs

Yes

Fixed monthly costs Use monthly overhead that stays in place, like rent, payroll, software, and admin. $ Low overhead High overhead

Break-even chart Revenue Total costs

Which expenses are fixed, variable, or capacity-driven in a packaging break-even model?

Cost classification

Break-even gets unreliable when unit materials, ink, scrap, and freight are buried in overhead. Keep usage-based costs variable, and model staffing or factory costs by how they actually scale.

Expense	Cost	Break-Even Treatment	Common Mistake
Lead Packaging Designer payroll	Fixed	Use scheduled salary as monthly overhead until headcount changes.	Tying design pay to each order instead of planned staffing.
Production Manager payroll	Semi-fixed	Hold flat within current capacity, then step up when FTE rises.	Spreading management salary as a pure unit cost.
Production Technician payroll	Semi-fixed	Model as capacity labor that steps from 1.0 FTE to 3.0 FTE over the forecast.	Ignoring hiring steps as unit volume grows.
Raw Material Paperboard	Variable	Charge $0.70 per custom retail box unit in the source model.	Treating paperboard usage and scrap as fixed overhead.
Printing Ink	Variable	Apply per-unit ink rates by product, such as $0.15 for custom retail boxes.	Blending ink into factory overhead and hiding margin shifts.
Sales Commissions	Variable	Use 4.0% of revenue in the first year, declining to 3.0% by the mature year.	Leaving commissions out of contribution margin.
Shipping & Logistics	Variable	Use 3.0% of revenue in the first year, declining to 2.0% by the mature year.	Treating freight as fixed when shipments rise with sales.
Factory Utilities	Semi-variable	Use 1.0% of revenue, and review the base-versus-usage split as volume ramps.	Putting all utilities into fixed overhead despite machine usage.

How does break-even shift across lean, base, and full packaging runs?

Scenario table

Break-even gets safer as output rises because fixed payroll and office costs get spread over more units. The lean case only clears it by a small margin, while the base and full cases build a stronger cushion.

Planning assumptions only; actual results will move with mix, waste, freight, and labor use.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch case	$59.3k	$8.1k	$41.0k	86.3%	$10.1k	Just above break-even, so a waste spike can wipe out profit.
Base steady-state case	$121.1k	$14.9k	$50.2k	87.6%	$55.9k	Comfortably above break-even, with room for normal mix shifts.
Full utilization case	$182.9k	$20.1k	$64.6k	89.0%	$98.3k	Strong cushion; this is the safest setup for overhead coverage.

What breaks the break-even plan if orders slow or costs jump?

Stress test

The base Year 1 plan has about an $85K cushion over break-even. A 15% sales dip nearly wipes it out, and higher overhead or freight can move the break-even line fast before Month 13.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$508K	$85K cushion	Base case clears break-even, but not by much.
Revenue shortfall	Revenue falls 15% to about $504K.	$508K	$4K gap	A small sales miss removes almost all cushion.
Fixed-cost rise	Monthly overhead rises 10% to about $451K.	$559K	$34K cushion	Added rent or payroll pushes break-even higher fast.
Margin pressure	Shipping & logistics rises from 3.0% to 30.0% of revenue.	$764K	$171K gap	Freight and scrap can break the plan on their own.
Combined pressure	Revenue falls 15%, overhead rises 10%, and freight reaches 30% of revenue.	$840K	$336K gap	Lower sales plus higher cost can push launch below break-even.

What should a packaging founder verify before signing the lease and buying the line?

Founder checklist

Do not lock the lease or equipment buy until the Year 1 order book, margin, and cash trough all line up. This model needs 78,000 units in year one, about $41K a month of fixed burn, and $1.041M of cash to survive the Month 2 low point.

1Order floor78,000 units

Verify minimum orders across boxes, wraps, mailers, inserts, and trays so the Year 1 volume target is real, not just a spreadsheet line.

2Fixed burn$41K/mo

Check that rent, software, insurance, accounting, IT, supplies, and base pay stay near this load, and lock supplier quotes so unit costs do not creep.

3Margin mix81% CM

CM is the cash left after variable costs, so price freight against the 3.0% Year 1 shipping assumption and keep paperboard, film, corrugated, pulp, ink, adhesive, and coating in line.

4Capacity gate20K / 25K

Test artwork approval and print setup against 20,000 boxes and 25,000 mailers in Year 1 so the first line can run without overtime or rework.

5Cash trough$1.041M

Hold this cash in Month 2 on top of the $150K equipment buy, $20K raw stock, and $40K vehicle spend, or the launch can stall fast.

6Hiring gateMonth 13

Keep full hiring off until the pipeline can carry the modeled breakeven point, because payroll before demand will push the break-even date back.