How to Calculate Break-Even for a Shopify Store: A Step-by-Step Pricing Workflow with a Free Online Calculator

You do not need a finance degree or a complex spreadsheet to figure out if your Shopify product pricing makes sense. With a clear workflow and a few realistic assumptions, you can compute your break-even point, estimate profit at different sales volumes, and pressure-test pricing decisions in minutes. This guide walks you through a Shopify-specific approach and shows you how to run the numbers instantly using the free break-even and profit calculator from FullyCounted.

What break-even really means for a Shopify store

Break-even is the point where total revenue equals total costs. In other words, your store neither makes nor loses money at that sales level. It is a planning anchor. You use it to answer questions like: How many units must I sell each month to cover my Shopify fees, software subscriptions, rent, marketing, and the variable costs attached to each order.

In ecommerce, variable costs expand beyond product cost. They also include payment processing fees, shipping and packaging, discounts, and often the marketing spend required to acquire a customer. Your break-even will be inaccurate if any of these are left out.

The payoff is clarity. When you know your break-even units and break-even revenue, you can work backward to set prices, sales targets, and ad budgets that map to real profitability.

The simple break-even formula you will use

Most small stores use a contribution margin approach. The Investopedia guide to break-even analysis explains the core idea: contribution margin equals selling price per unit minus variable cost per unit. You then divide fixed costs by contribution margin to get break-even units.

• Contribution margin per unit = Price per unit minus variable cost per unit
• Break-even units = Fixed costs per period divided by contribution margin per unit
• Break-even revenue = Break-even units multiplied by price per unit

If you prefer a percentage view, contribution margin ratio is contribution margin divided by price. The Investopedia breakdown of the breakeven point aligns with this exact framework and works well for ecommerce.

Two quick notes for Shopify founders:

• Include payment processing and marketplace fees in variable costs. If you use Shopify Payments, your rate depends on plan. The Shopify pricing page lists online card rates starting at 2.9 percent plus 30 cents on Basic, 2.7 percent plus 30 cents on Grow, and 2.5 percent plus 30 cents on Advanced. If you do not use Shopify Payments, third-party transaction fees apply on top of your chosen gateway.
• Treat paid acquisition as variable per order when you can attribute spend to orders. Alternatively, if you run a steady monthly budget and a lot of organic traffic, you can allocate marketing as a fixed monthly cost. The workflow below shows both options.

Shopify-specific costs to factor in before you calculate

Ecommerce is a system. Getting break-even right means modeling the costs that hit every order and the overhead that runs every month. Here are the Shopify details that most affect your math:

Payment processing. If you use Shopify Payments, the Shopify pricing page documents the typical online card rate as 2.9 percent plus 30 cents on Basic, 2.7 percent plus 30 cents on Grow, and 2.5 percent plus 30 cents on Advanced, with higher premiums for Amex and commercial cards and a 1 percent uplift for international cards. If you use a third-party gateway, Shopify charges an additional fee by plan, also shown on the pricing page.

Advertising spend per order. A realistic customer acquisition cost can be derived from clicks and conversion rate. For context, WordStream’s 2024 Facebook Ads benchmarks show an average cost per click of about 0.77 dollars for traffic campaigns across industries, while the 2024 Google Ads benchmarks from WordStream show an average Search CPC of around 4.66 dollars. Your cost per order equals CPC divided by conversion rate, so improving conversion rate or CPC directly lowers break-even.

Typical conversion rate. Shopify’s editorial overview notes that Littledata’s analysis found the average Shopify conversion rate near 1.4 percent, and the Shopify article on ecommerce conversion rates highlights that 3.2 percent places you in the top 20 percent of stores. Use your own analytics when available, but these benchmarks help sanity-check assumptions.

Shipping and packaging. Carriers continue to adjust rates. The USPS November 2024 pricing announcement indicated shipping services would rise about 3.2 percent for Priority Mail and 3.9 percent for USPS Ground Advantage. Even small rate changes have a material impact on thin contribution margins.

Returns. Returns reduce realized revenue and add reverse logistics cost. The National Retail Federation’s 2024 report with Happy Returns found retailers estimated that 16.9 percent of their annual sales would be returned in 2024. If you sell in a high-return category, include a return rate allowance in your variable cost or as a revenue haircut.

Gross margin by category. It helps to compare your assumed product margin with industry norms. The NYU Stern dataset shows 2025 gross margins around 54 percent for Apparel and around 30 to 32 percent for general retail categories, based on Aswath Damodaran’s margins by sector. If your priced margin is far outside these bands, revisit COGS or price.

Shopify subscription and software. Your monthly plan and essential apps are fixed costs. The Shopify pricing page lists monthly plan pricing, and many apps or email tools add to your fixed stack. Inventory software, design tools, and analytics also belong here.

The step-by-step break-even workflow for Shopify

You can do this on a napkin. Or better, enter the numbers into the free ecommerce calculator on FullyCounted and see the results in real time. Either way, this is the exact sequence that keeps the model simple and accurate.

Step 1: Define one product and its selling price

Start product by product. Pick the item you plan to push in ads or expect to represent the bulk of revenue. Record the selling price before tax and shipping. If you commonly run discounts, use your typical realized price. List price inflation makes forecasts look better than reality.

Step 2: List variable costs per order

Variable costs scale with each unit sold. Add these carefully:

• Product cost per unit. Include landed cost with freight into your warehouse or 3PL and any packaging you do not reclaim.
• Payment processing fees. Use your actual Shopify Payments rate or third-party total fees. The Shopify pricing tables list the standard rates per plan. Multiply the percentage by the selling price, then add the per-transaction fixed fee.
• Shipping and packaging out. Estimate your average label cost for this SKU and the mailer or box. If you charge customers for shipping, subtract that revenue from this line or model it separately.
• Discounts and returns. If you run a steady 10 percent discount, either lower the selling price assumption by that amount or include an equivalent per-unit cost line. For returns, use a conservative allowance based on your category. The NRF and Happy Returns study is a helpful reference point.
• Paid acquisition per order. If you buy traffic, convert CPC and conversion rate into cost per order: CAC = CPC divided by conversion rate. For orientation, WordStream’s 2024 benchmarks show Facebook CPC around 0.77 dollars and the Google Ads 2024 report shows Search CPC around 4.66 dollars. A 2 percent conversion on a 1.00 dollar CPC yields a 50 dollar CAC.

Add up these items. This total is your variable cost per unit.

Step 3: Compute contribution margin

Contribution margin per unit equals price minus total variable cost per unit. If price is 40 dollars and variable cost is 28 dollars, contribution margin is 12 dollars. The higher this number, the fewer units you need to break even.

If you prefer ratios, contribution margin ratio is contribution margin divided by price. That same example would be 12 divided by 40 equals 30 percent.

Step 4: List fixed monthly expenses

Fixed costs do not move with unit volume in the short run. Common items include:

• Shopify plan and payment add-ons
• Software and tools such as email, analytics, subscriptions, and design apps
• Rent or utilities if you operate a studio or warehouse
• Baseline marketing costs you incur whether or not orders arrive
• Other costs such as accountant, insurance, and professional services

If you are not sure which costs belong where, see the primer on ecommerce cost structure in FullyCounted’s fixed vs variable costs guide. Keep the model simple. You can always refine later.

Step 5: Calculate break-even units and break-even revenue

Use the contribution margin formula described in Investopedia’s break-even overview:

• Break-even units = Fixed costs divided by contribution margin per unit
• Break-even revenue = Break-even units multiplied by price

If fixed costs are 3,000 dollars and your contribution margin per unit is 12 dollars, break-even units equal 3,000 divided by 12 equals 250 units. If your price is 40 dollars, break-even revenue is 250 times 40 equals 10,000 dollars.

Step 6: Sanity-check with conversion and traffic

Your store’s conversion rate translates unit targets into traffic targets. The Shopify article on conversion rates references Littledata research showing an average Shopify conversion rate of around 1.4 percent, with 3.2 percent placing stores in the top 20 percent. At 2 percent conversion, 250 orders require roughly 12,500 sessions in a month. If you plan to buy that traffic, the CPC and CAC math must still leave enough contribution margin to hit break-even.

Step 7: Stress-test the levers

Before you lock your plan, pressure-test. What happens if CPC rises by 20 percent. If your return rate ticks up during holidays. If USPS raises rates midyear, as indicated by the USPS 2024 pricing notice. One advantage of using an on-page calculator is that you can change one input at a time and see the new break-even instantly.

A complete example you can copy

Suppose you sell a 40 dollar product on the Shopify Basic plan.

• Price: 40 dollars
• Variable costs per unit:
  • Product COGS: 12 dollars
  • Shopify Payments fees: 2.9 percent of 40 dollars equals 1.16 dollars plus 0.30 dollars fixed equals 1.46 dollars, per the Shopify pricing documentation
  • Shipping and packaging: 5 dollars average
  • Discount allowance: 10 percent typical promotion equals 4 dollars reduction, modeled as a cost
  • Paid acquisition: If CPC averages 0.80 dollars, and conversion rate is 2 percent, CAC equals 0.80 divided by 0.02 equals 40 dollars. If you are running this SKU mostly on organic or email, you could use 0 dollars here, or a lowered figure to reflect a blended mix. For this example, we will show two cases.

Case A: Paid acquisition heavy

• Variable cost subtotal: 12 + 1.46 + 5 + 4 + 40 equals 62.46 dollars
• Contribution margin: 40 minus 62.46 equals negative 22.46 dollars
• Not viable at current price and ad performance. You would need to raise price, cut CAC, or eliminate the discount to get into positive contribution.

Case B: Organic or returning-customer heavy

• Variable cost subtotal: 12 + 1.46 + 5 + 4 + 0 equals 22.46 dollars
• Contribution margin: 40 minus 22.46 equals 17.54 dollars

Fixed costs per month:

• Shopify Basic plan: 39 dollars if paying monthly, per Shopify pricing
• Software and tools: 120 dollars
• Rent and utilities: 800 dollars
• Other overhead: 300 dollars
• Total fixed: 1,259 dollars

Break-even for Case B:

• Break-even units: 1,259 divided by 17.54 equals about 72 units
• Break-even revenue: 72 times 40 equals about 2,880 dollars

With a 2 percent conversion rate, 72 orders require about 3,600 sessions in a month. If you can hit that traffic target with organic, email, or low-cost creators, the math can work. If you rely on paid, you either need a significantly higher conversion rate, a lower CPC, or a higher price.

You can run this scenario instantly on the FullyCounted calculator, save your analysis, and export a clean report for your planning deck.

Interpreting results: what to do with your break-even number

A break-even unit target is not just a number, it is a plan. If your break-even requires 800 units a month and your current traffic can support only 100 orders, pricing is unlikely to save you alone. In that case, your real decision is to fund traffic growth, pivot the offer, or lower fixed costs.

If break-even is within reach, prioritize the levers that move contribution margin and sales volume most with the least effort:

• Lower CAC by improving conversion rate. According to Shopify’s overview, crossing 3.2 percent conversion would put you in the top 20 percent of Shopify stores, as summarized in the Shopify conversion article referencing Littledata. Even a smaller step from 2.0 to 2.5 percent lowers CAC by 20 percent at the same CPC.
• Trim payment and shipping friction. Use Shop Pay and clear delivery estimates to increase checkout completion. Consider adjusting free-shipping thresholds to lift average order value.
• Revisit discounting. Discounts reduce realized price dollar for dollar. If you must promote, test bundles that raise unit economics rather than steep across-the-board cuts.
• Work with suppliers. A 5 to 10 percent reduction in COGS directly lifts contribution margin.
• Watch returns. If returns are spiking, improve product detail, sizing charts, and post-purchase education. The NRF returns report underscores how costly high return rates can be.

Finally, model ramp time. If the calculator shows you need 250 units per month to break even, you might not hit that level in month one. Use the exportable report from FullyCounted to set monthly milestones and check progress.

Benchmarks and quick heuristics to check your math

It helps to compare your assumptions to outside data while planning.

• Conversion rate. The Shopify article on conversion rates notes 1.4 percent average across Shopify stores per Littledata, with 3.2 percent representing top 20 percent performance. If your model requires 6 to 8 percent conversion to work, revisit pricing or CAC.
• CPC and CAC. WordStream’s 2024 Facebook Ads analysis shows average CPC around 0.77 dollars for traffic campaigns, and the 2024 Google Ads benchmark report shows average Search CPC near 4.66 dollars. Multiply your expected CPC by one divided by conversion rate to get CAC. Then ask: does contribution margin still cover fixed costs at plausible volumes.
• Gross margin by category. To double-check your COGS and pricing relationship, compare to Damodaran’s 2025 sector margins. Apparel shows gross margins around 54 percent while many retail segments sit near 30 percent. If you are far below peers without a strategy to make up for it in volume, profitability will be tough.
• Shipping trend. Carrier rate updates matter. The USPS 2024 pricing notice cited increases in the 3 to 4 percent range for popular services. Bake a buffer into your per-order shipping assumption.
• Return rate. Use a realistic allowance for your category. The NRF’s 2024 estimate put returns at 16.9 percent of annual sales overall, with some categories much higher. A small allowance can protect your plan from shocks.

Use FullyCounted to do the math in minutes

The fastest path to clarity is to input your numbers into an on-page calculator and iterate. The free break-even and profit analysis tool at FullyCounted is built for ecommerce founders, side hustlers, and solo operators who want instant results without spreadsheets. You can:

• Enter product-level variables like product name, cost per unit, and selling price
• Add monthly fixed expenses like rent and utilities, marketing and ads, software and tools, and other costs
• See break-even units and revenue update live as you type
• Save analyses and export a clean report for planning and presentations

If you are weighing subscription vs one-time offers, the companion guide on subscription vs one-time LTV, payback, and cash flow shows how to extend the break-even mindset to payback period and lifetime value.

Pricing decisions you can make today

Once your calculator is set up, use it to make practical choices:

• Set a defensible price. If the current break-even is too far away, test a higher price and watch contribution margin lift immediately. If a price increase is not feasible, try value stacking with bundles to raise average order value and spread fixed fees over more dollars of revenue.
• Choose a channel strategy. If CAC via Search is untenable at your conversion rate, test creator whitelisting or affiliates where you pay on performance. The contribution margin line item for paid acquisition is where you will see impact instantly.
• Triage fixed costs. Export your FullyCounted report and scan for recurring tools that do not contribute directly to conversions. Every 50 dollars trimmed lowers break-even units.
• Plan inventory. Break-even units inform your initial buy and reorder points. If your realistic ramp is 150 units per month, do not buy 1,000 units unless supplier minimums or seasonality justify it.

Ready to launch your ecommerce business

When your break-even is dialed in, you can go from idea to launch with less guesswork. If you are still picking a platform, you can start a store quickly with Shopify. The pricing, payment rates, analytics, and sales channels are documented clearly, and the plan fees map directly into the fixed-cost line of your model as shown on the Shopify pricing page.

Use the free calculator at FullyCounted to test a few price points and ad assumptions before you commit. The more you iterate up front, the fewer surprises you will encounter after launch. If you want to learn more about cost structure and assumptions, explore the FullyCounted blog, and if you need details on how your data is handled, review the privacy policy and terms of use.

There is no magic in break-even math. It is about writing down all the costs that actually hit your store, adding a realistic view of how customers arrive, and choosing a price that supports your plan. Do that, and profitability becomes a target you can reach rather than a mystery.