Break Even Price for Online Products

Break-even price is the selling price where profit is zero after costs, fees, shipping, discounts, and ads. It is not the target price; it is the danger line.

A useful target price should sit above break-even by enough margin to absorb mistakes and market changes.

Break-even price = fixed unit costs / (1 - percentage fee rates - ad allowance rate). Fixed unit costs include product cost, shipping, packaging, and other per-order expenses.

If fees are charged as a percentage of revenue, they must be accounted for in the denominator, not only added as fixed costs.

Use break-even price to decide the lowest acceptable discount or campaign price. If a promotion goes below break-even, treat it as deliberate acquisition spend.

For normal selling, build a margin buffer above break-even.