Use case
Break-even Point for UK Ecommerce
A real Shopify / Etsy break-even calculation for a small UK ecommerce business. Find the unit volume that makes the store viable.
The scenario
Hannah runs a candle brand selling on Shopify and Etsy. She sells one main product at £32 per unit. Here are her monthly costs.
Fixed costs (per month)
| Shopify Basic plan | £18 |
| Email + apps | £25 |
| Domain + Canva | £12 |
| Studio space share | £200 |
| Owner's monthly draw | £1,000 |
| Total fixed | £1255 |
Variable costs (per unit sold)
| Wax, wick, fragrance, jar | £9.00 |
| Packaging + label | £1.50 |
| Royal Mail / shipping | £4.00 |
| Card processing (≈4.4%) | £1.40 |
| Total variable | £15.90 |
Contribution margin
Contribution per unit = Price − Variable cost
Contribution per unit = £32 − £15.90 = £16.10
Break-even units
Break-even units = Fixed costs ÷ Contribution per unit
Break-even units = £1255 ÷ £16.10 = 78 units / month
Break-even revenue = 78 × £32 = £2,496
Hannah needs to sell 78 candles per month to cover all her costs (including her own £1,000 draw). Every unit beyond that is real profit.
What happens if she changes the price?
- Selling at £36 raises contribution to £20.10 → break-even drops to about 63 units
- Discounting to £28 cuts contribution to £12.10 → break-even rises to about 104 units
Small price moves shift break-even sharply. This is why cutting price to "sell more" often backfires for small ecommerce stores.
Run this for your store
Use the Break-even Calculator with your own fixed and variable costs. Then sanity-check your unit margin with the Profit Margin Calculator.
New to setting prices? Start with Markup vs Margin Explained and How to Calculate Pricing for a Small Business.
Frequently asked questions
What counts as a fixed cost for ecommerce?
Anything that doesn't change with volume in the short term: Shopify subscription, app subscriptions, domain, accounting software, marketing retainers and your own salary if you take a fixed draw.What counts as a variable cost?
Anything that changes per unit sold: product cost, packaging, shipping, payment processing fees and platform transaction fees (Etsy, eBay or Amazon FBA).How do I work out break-even units?
Divide total fixed costs by the contribution margin per unit (selling price minus variable cost). The result is how many units you need to sell to cover fixed costs.Why does break-even matter for small ecommerce stores?
It tells you the minimum sales volume needed to stop losing money. Below it, every fixed cost eats into your savings. Above it, you're profitable on every additional unit sold.