Break-even, in plain English
Every sale your business makes contributes something toward your fixed costs — rent, salaries, software, insurance, the bills that arrive whether you sell anything or not. That something is the contribution per unit: the selling price, minus the variable cost of making that one sale, minus any percentage fees taken off the price, like card processing or marketplace commissions. Divide your monthly fixed costs by the contribution per unit and you get the break-even point: the number of units you must sell before the business has covered its costs and starts earning profit. Below it, you are losing money; above it, every additional sale adds one contribution's worth of profit.
The most common mistake in this math is forgetting the fees line. A product priced at $49 with $18 of variable cost looks like a $31 contribution — until a 9.5% platform or card fee quietly takes another $4.66 off every sale and the real contribution is $26.35. That difference moves the break-even point from 136 units to 160, which is the difference between a month that works and a month that mysteriously doesn't. Put every percentage that comes off the top — marketplace fees, payment processing, commissions — into the fee field.
Once you know the break-even point, the target-profit line turns it into a goal: it adds your desired monthly profit on top of fixed costs and tells you the unit count that delivers both. Compare that number with your expected units, honestly estimated. If target volume is far beyond what you have ever sold, the levers are limited and clear — raise price, cut variable cost, cut fixed cost, or accept a smaller target. The arithmetic is unforgiving, but it is much cheaper to learn that here than at the end of a quarter.