Refurbished Electronics Break-Even Analysis: $38K Monthly Sales

Fixed costs $6.9K Monthly overhead base

Contribution margin 82.6% After variable costs

Break-even revenue $8.4K Cover monthly overhead

Break-even timing Month 1 Launch-month break-even

Break-even calculator

Use this to test monthly revenue, variable expenses, and fixed costs against break-even for a refurbished electronics business.

Lean Base Full

Monthly revenue Revenue sets the pool that covers variable costs and then fixed costs. $ Low sales High sales Variable expenses Include parts, labor, fees, shipping, and warranty costs that rise with sales. $ Tight costs Heavy costs

Money available to cover fixed costs $554,950 $649,583 revenue - $94,633 variable expenses

Margin ratio

85%

Covers fixed costs

Yes

Fixed monthly costs Include rent, payroll, software, and other monthly overhead. $ Lean setup Large base

Break-even chart Revenue Total costs

Which refurbished electronics expenses are fixed, and which move with sales?

Cost classification

Break-even works only if unit-linked spend stays out of overhead. Here, platform fees, payment fees, revenue-based COGS, and $13 per device repair handling should move with sales, while rent and baseline overhead stay fixed.

Expense	Cost	Break-Even Treatment	Common Mistake
Facility rent	Fixed	Use $4,500 per month from Month 1 through Month 60.	Allocating rent per unit and hiding true monthly overhead.
Utilities	Fixed	Use $800 per month inside baseline overhead for the planning range.	Overcomplicating a stable monthly bill before volume changes justify it.
Marketing and platform fees	Variable	Treat 100% as sales-linked: 10.0% in the first year, falling to 6.0% by the fifth year.	Budgeting it as a flat ad line and overstating contribution margin.
Payment processing fees	Variable	Apply the fee to revenue: 3.0% in the first year, declining to 2.0% by the fifth year.	Leaving card fees below EBITDA instead of netting them against each sale.
Revenue-based COGS	Variable	Use 2.0% of revenue: 0.5% parts, 0.2% quality control, 0.8% warranty, 0.3% packaging, and 0.2% shipping insurance.	Treating warranty, packaging, and insurance as overhead instead of unit economics.
Repair and handling per unit	Variable	Use $13 per sold unit: $2 diagnostics, $1 cleaning, $5 labor, $3 accessories, and $2 returns.	Spreading returns and handling monthly, which understates volume risk.
Technician labor over base capacity	Semi-variable	Keep base technician salaries in payroll, but model overtime or temp repair help when unit flow exceeds staffed capacity.	Assuming repair labor stays flat when device intake rises.
Later-year staff additions	Semi-fixed	Step up payroll when hiring thresholds hit, such as operations, marketing, and inventory roles starting in Month 13.	Adding headcount evenly by month instead of in capacity steps.

How does break-even shift from a lean refurbishment run-rate to the Year 1 launch plan and the Year 3 growth case?

Scenario table

Break-even is tight in the lean case, clearly positive in the Year 1 plan, and strongest in the Year 3 growth case. Revenue grows faster than fixed costs, but paid sourcing is still the main risk to test.

These are planning assumptions, not guarantees; device sourcing cost is excluded, so actual margin can move.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean refurbishment run-rate	$38,400	$6,682	$31,733	82.6%	$0	Right at break-even, so cushion is thin.
Base Year 1 launch plan	$282,917	$49,154	$31,733	82.6%	$202,029	Month 1 clears break-even with a solid cushion.
Full Year 3 growth plan	$649,583	$94,633	$61,525	85.4%	$493,425	Growth still clears break-even, but fixed payroll rises fast.

What breaks this break-even plan if sales slow or costs creep up?

Stress test

The plan still clears break-even by a wide margin, but the cushion narrows if repair yield slips, returns climb, or warranty claims push costs up. The biggest pressure point is not demand alone; it’s margin erosion plus higher fixed overhead.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$38,400	$244,517 cushion	Large cushion, so the plan is not near break-even stress.
Revenue shortfall	First-year monthly revenue falls 20% to $226,333.	$38,400	$187,933 cushion	Demand softens, but break-even still stays covered.
Fixed-cost increase	Fixed costs rise 15% from $31,733 to $36,493.	$44,165	$238,752 cushion	Overhead pressure lifts break-even, so staffing and rent need control.
Margin pressure	Contribution margin drops from 826% to 750%.	$42,311	$240,606 cushion	Lower repair yield or more returns can erode the cushion fast.
Combined pressure	Contribution margin falls to 750% and fixed costs rise 15%.	$48,657	$234,260 cushion	Two pressures hit at once, but the plan still has room above break-even.

Can you prove the repair business breaks even before you lock in staff, benches, and capex?

Founder checklist

Before you commit to the lease, benches, and hiring, prove the first-year burn, repair margin, and throughput still support break-even. If monthly fixed costs drift above about $31.7K or you can’t clear 70 devices a month, the model gets thin fast.

1Fixed load$31.7K/mo

Confirm Year 1 wages and overhead stay near this level so break-even does not move before volume does.

2Demand proof70/mo

Verify you can sell through about 70 repaired devices a month before you add more sourcing or bench capacity.

3Unit margin$13/unit

Track diagnostic, cleaning, labor, accessory, and return cost at $13 per device, and keep warranty reserve at 0.8% of revenue.

4Bench output517/mo

Make sure the repair bench, parts flow, and crew can support about 517 devices a month in the first year.

5Cash cushion$1.214M

Keep the modeled minimum cash need visible at launch so a slow start does not choke repairs or sales.

6Capex cap$155K

Cap early spend on workstations, equipment, shelving, office setup, IT, the vehicle, platform work, and security until return rates and repair yield are measured.