Break-even price: the lowest price that still covers your costs

The break-even price is the selling price at which one order earns exactly nothing after all its variable costs. Because marketplace and payment fees grow with the price, you cannot simply add up the costs – you have to solve for the price. For the example product it is €31.83 incl. VAT instead of the current €39.99.

Enter your own costs – the calculator solves for the break-even price and the price for your target margin.

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The formula

Split the costs into price-independent costs (product, shipping, advertising, returns, other) and costs that are a percentage of the price (marketplace and payment fees). Then the break-even price follows directly – the calculator uses exactly this formula, including returns and VAT.

Price-independent costs	product + shipping + ads + returns + other (+ fixed fees)
Break-even price (gross)	price-independent costs ÷ ((1 − return rate) ÷ (1 + VAT) − fee %)
Price for target margin m	price-independent costs ÷ ((1 − return rate) × (1 − m) ÷ (1 + VAT) − fee %)

Why simply adding up costs is wrong

Adding all costs of the example gives roughly €19.30 plus fees. But a 15 % fee on a higher price is higher too, and VAT has to be added on top of the net price. Solving the formula takes both into account; the result is the exact lower limit.

Your hard limit for discounts

The break-even price is also the lowest price a sale may reach. The maximum discount is 1 − break-even price ÷ regular price – here 20%. Any deeper discount loses money on every order, no matter how many more you sell. Below that limit, every discount still needs more orders to keep your total contribution – the discount calculator shows how many.

Table: break-even price by marketplace fee

Same product (purchase price €12.00, shipping €4.50, €3.00 ads, 10 % returns, 19 % VAT), only the marketplace fee changes:

Marketplace fee	Break-even price incl. VAT	Price for 25 % margin
0%	€25.52	€34.03
8%	€28.54	€39.61
15%	€31.83	€46.26
20%	€34.69	€52.56

Worked examples: Product for €39.99 on a marketplace

15 % marketplace fee, purchase price €12.00, shipping €4.50, €3.00 advertising per order, 10 % returns at €5.00, 19 % VAT.

Current price incl. VAT: €39.99
Contribution per order: €4.95
Break-even price incl. VAT: €31.83
Break-even price excl. VAT: €26.75
Price for 25 % margin incl. VAT: €46.26

You could lower the price by up to €8.16 before each order stops covering its variable costs – but then nothing is left for fixed costs.

Common mistakes and how to fix them

Treating break-even as a sensible price

Why it matters: At break-even nothing is left for rent, software, salaries or your own income.

Fix: Use the price for your target margin; break-even is only the absolute lower limit for discounts.

Forgetting that fees grow with the price

Why it matters: Percentage fees make a simple sum of costs too low – the real break-even is higher.

Fix: Solve for the price with the formula above (or let the calculator do it).

Leaving out returns

Why it matters: Returned orders still cost shipping, fees and ads, so the break-even price rises with the return rate.

Fix: Include the expected return rate and the cost per return.

Frequently asked questions

What if there is no break-even price?

If the percentage fees and returns take as much as the net price brings, no price can cover the costs – the calculator then shows that no price breaks even. Lower the fees or costs before you list the product.

Is the break-even price with or without VAT?

Both are useful: the price incl. VAT is what customers see, the price excl. VAT is your revenue. The calculator shows both.

Does the break-even price include fixed costs?

No – it covers the variable costs of one order. Fixed costs are covered by the margin you add on top.