What are fixed vs. variable costs for online sellers?

Fixed costs stay the same regardless of units sold: product photography, initial PPC budget, software subscriptions, storage fees on standing inventory, trademark registration. Variable costs change with each unit: product cost, FBA fulfillment fee, Amazon referral fee, per-unit shipping, per-unit ad spend. Both are needed for accurate break-even analysis.

What is contribution margin?

Contribution margin = Sale Price − Variable Cost per Unit. It's how much each unit 'contributes' toward covering your fixed costs and eventually generating profit. A higher contribution margin means you need fewer units to break even. Increasing your price or reducing variable costs both improve contribution margin.

How many units do I need to sell to be profitable on Amazon?

This depends entirely on your cost structure, but a practical rule: if your break-even quantity exceeds 50% of your projected monthly sales velocity (from tools like Jungle Scout or Helium 10), the product is risky. You want to break even well within your first month of steady sales to maintain healthy cash flow for restocking.

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Break-Even Calculator

Estimate the units and revenue needed to break even — before you source or launch

The Break-Even Calculator tells you the minimum number of units you must sell to cover all your costs. For Amazon sellers, this is the single most important pre-launch calculation: if your break-even quantity is more than your realistic monthly sales velocity, the product isn't viable. This tool calculates break-even units, break-even revenue, contribution margin, and units needed to hit a target profit.

Fixed costs ($)Sale price per unit ($)Variable cost per unit ($)Target profit (optional, $)

Contribution margin per unit$5.39

Contribution margin ratio18.0%

Break-even units93 units

Break-even revenue$2789.07

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Jungle Scout — Amazon Sales Estimator

Verify monthly sales velocity estimates to check if your break-even is achievable.

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Break-even analysis tells you whether a product or business is worth pursuing before you spend money. Here's how to set up an accurate break-even calculation.

Step 1 — Identify your fixed costs

Fixed costs are one-time or recurring costs that don't change with units sold. For a new Amazon product: professional photography ($150–400), initial PPC launch budget ($300–500), product samples ($50–200), trademark application (optional, $250–350). For ongoing fixed costs: software subscriptions, monthly storage fees on existing inventory.

Step 2 — Enter your sale price

Use your planned or current selling price. If you're still deciding, run the calculator at 2–3 price points to see how break-even quantity changes. Higher prices reduce your break-even quantity but may reduce sales velocity — the trade-off depends on your category.

Step 3 — Enter variable cost per unit

Variable costs change with every unit sold: product cost (COGS), inbound shipping per unit, FBA fulfillment fee, Amazon referral fee, per-unit PPC spend. Add all of these together. For a typical Amazon FBA product selling at $29.99: COGS $10 + shipping $1.50 + FBA $5.10 + referral $4.50 + PPC $3.00 = $24.10 variable cost.

Step 4 — Interpret the results

Break-even units = Fixed Costs ÷ Contribution Margin per Unit. If your break-even is 30 units and you can realistically sell 200 units per month, the product has strong potential. If break-even is 150 units and realistic monthly sales are 80, reconsider before investing.

💡 Pro tips

•Include your expected monthly PPC spend in fixed costs for a more conservative break-even
•For Amazon, a break-even under 50% of projected monthly sales is a good signal
•Use break-even analysis to compare two pricing strategies — not just to find the floor price
•Run the calculator with pessimistic assumptions (lower price, higher costs) to stress-test your plan

Frequently Asked Questions

The break-even point is the number of units (or amount of revenue) at which your total sales cover your total costs — zero profit, zero loss. For Amazon FBA sellers, it's the minimum number of units you need to sell in a given period to recover your upfront investment and ongoing costs.