| Conv. Rate | Revenue / Click | Break-Even CPC | Target CPC | vs Current CPC |
|---|---|---|---|---|
| Enter values above to see scenarios. | ||||
What is a break-even point?
The break-even point (BEP) is the sales volume at which your total revenue exactly equals your total costs — you make neither a profit nor a loss.
It is calculated as: BEP = Fixed Costs ÷ (Selling Price − Variable Cost per Unit). Any
unit sold beyond this point generates profit; any unit short means a loss.
What counts as a fixed cost vs. a variable cost?
Fixed costs stay the same regardless of how many units you sell — rent, salaries, insurance, software subscriptions, loan repayments.
Variable costs change in direct proportion to output — raw materials, packaging, shipping per order, payment processing fees, sales commissions.
What is the contribution margin and why does it matter?
The contribution margin (CM) is the amount each unit sale "contributes" toward
covering fixed costs and generating profit after variable costs are paid:
CM = Selling Price − Variable Cost.
A higher CM per unit means you need fewer sales to break even. If your CM is zero or negative, you can never break even no matter how many units you sell.
What is break-even CPC and how is it calculated?
The break-even CPC is the maximum you can pay for one ad click and still make zero loss.
Formula: Break-Even CPC = AOV × Conversion Rate × Gross Margin.
Does this calculator account for taxes?
No — this tool calculates pre-tax break-even. For a post-tax figure, adjust your profit target upward to account for your effective tax rate. Always consult a qualified accountant for tax-adjusted planning.