How many do I need to sell before I make money?
Direct answer
Break-even units = fixed costs ÷ (price per unit − variable cost per unit). If fixed costs are 3,000, price is 50 and variable cost is 20, the break-even is 3,000 ÷ 30 = 100 units.
Example
| Item | Amount |
|---|---|
| Fixed costs per month | 3,000 |
| Price per unit | 50 |
| Variable cost per unit | 20 |
| Contribution per unit | 30 |
| Break-even | 100 units |
Uses
- Test whether a price is realistic.
- Set sales targets.
- Compare scenarios.
Where Teyro fits
Teyro's How to Price a Product or Service course turns this into short lessons you can play in a few minutes a day. It has 50 lessons, and you can start free.
The bottom line
Know your break-even before you set your price.
