Break-Even Point on a Marketplace

The break-even point is the sales volume at which you come out even: revenue fully covers all expenses, but there is no profit yet. Everything sold above that point starts bringing profit; everything below it works at a loss. For a seller it is the benchmark for "how many units a month do I have to sell to stay out of the red", counting purchase, commission, logistics and fixed costs.

In short: the break-even point = how much you have to sell to come out even. Below it, a loss; above it, profit.

• Determine your fixed costs for the period (advertising, storage, subscriptions, salaries).
• Calculate the margin per unit: price minus variable costs (purchase, commission, logistics, acquiring fees).
• Break-even point in units = fixed costs / margin per unit.
• Example: fixed costs 30,000 ₽, margin 150 ₽ per unit → you need to sell 200 units to come out even.

• To see whether the sales plan is realistic before you buy the goods.
• To assess whether the product can carry an advertising budget — advertising raises the break-even point.
• To decide on price: with a low margin the break-even point shoots up.

"What is the break-even point in simple terms?" It is the sales volume at which revenue covers all expenses and you come out even. Sales above that point bring profit, below it a loss.

"How do you calculate the break-even point in units?" Divide the fixed costs for the period by the margin per unit (price minus variable costs). The result is how many units you need to sell to come out even.

"How does advertising affect the break-even point?" An advertising budget is a fixed cost that raises the break-even point: you have to sell more to cover it. That is why break-even is calculated including ad spend share (DRR).

"What if the break-even point is unreachable?" Revise the price, cut variable costs, reduce fixed costs or drop the product. If breaking even requires an unrealistic volume, the product is loss-making under its current economics.