Shopify Break-Even Calculator
Your Shopify break-even point is the number of orders — and revenue — you need each month before the store stops losing money. Unlike a one-off product break-even, a Shopify store carries recurring fixed costs (plan, apps, ads) that have to be covered every month before a single dollar of profit appears. This calculator separates per-order economics from monthly fixed costs so you can see exactly which lever (price, COGS, ad spend, or app stack) moves the needle.
Last Updated: June 2026
Reviewed for current Shopify Payments and subscription tier pricing.
Order economics
What happens on a single order before fixed costs.
Pre-discount product subtotal.
What you pay your supplier or to make the product.
Postage, fulfillment, packaging.
Set to 0 if you offer free shipping.
Blended discount across orders.
Reserve for refunds and returns.
Fees
Shopify Payments defaults shown — change if you use a third-party gateway.
Shopify Payments Basic plan is 2.9%.
Usually $0.30 in the US.
0% if you use Shopify Payments. 2% / 1% / 0.5% on Basic / Shopify / Advanced.
Monthly fixed costs
The bills that show up whether you sell anything or not.
Basic $39 · Shopify $105 · Advanced $399.
Email, reviews, theme, page builder, etc.
Meta, Google, TikTok — all paid traffic.
Domain, contractor, software, storage.
Contribution margin / order
$26.40
55.6% of order
Monthly fixed costs
$369.00
Plan + apps + ads + other
Break-even orders / month
14
0.5 per day
Break-even revenue / month
$665.00
Sales $: $663.98
Healthy contribution margin
You keep 56¢ of every $1 toward fixed costs. Anything above 14 orders is profit.
Per-order breakdown
Where each order's dollars actually go before fixed costs.
- Order subtotal (product + shipping charged)
- $50.00
- Less: discount
- −$2.50
- Net price
- $47.50
- Less: cost of goods
- −$12.00
- Less: shipping you pay
- −$6.00
- Less: payment processing & transaction fees
- −$1.68
- Less: refund / return reserve
- −$1.43
- Contribution margin per order
- $26.40
Contribution margin is what's left to cover monthly fixed costs and then become profit.
How to lower your break-even point
Raise average order value
Bundles, upsells, and free-shipping thresholds lift contribution per order without raising fixed costs.
Audit recurring apps
Most stores carry $30–$150/mo of apps they no longer use. Each $30 of fixed cost adds ~1 order/mo to break-even.
Use Shopify Payments
Avoids the 0.5–2% extra transaction fee Shopify charges on third-party gateways.
Negotiate shipping rates
Shopify Shipping discounts USPS/UPS up to 88% — dropping $1 of shipping per order can shift break-even by dozens of orders.
Cap discounts
A 20% sitewide discount on a 25% contribution margin nearly wipes out profit per order.
Improve conversion before scaling ads
A 1.0% → 1.5% conversion lift halves your effective CAC, which behaves like cutting ad spend in half.
All calculations are estimates based on average platform fees. Real profits may vary depending on category, ads, and shipping.
Formula
Net price per order = (AOV + Shipping charged) × (1 − Discount %) · Variable cost per order = COGS + Shipping you pay + (Net price × (Processing % + Transaction %)) + Fixed processing fee + (Net price × Refund %) · Contribution margin = Net price − Variable cost · Monthly fixed costs = Shopify plan + Apps + Ad spend + Other fixed · Break-even orders = ⌈Monthly fixed costs ÷ Contribution margin⌉ · Break-even revenue = Break-even orders × Net price
Worked example
AOV $45, COGS $12, shipping cost $6, shipping charged $5, 5% average discount, 3% refund reserve, Shopify Payments 2.9% + $0.30, Basic plan $39, $30 apps, $300 ads.
- Gross price = 45 + 5 = $50
- Discount = 50 × 5% = $2.50 → Net price = $47.50
- Processing = 47.50 × 2.9% + 0.30 ≈ $1.68
- Refund reserve = 47.50 × 3% ≈ $1.43
- Variable cost = 12 + 6 + 1.68 + 1.43 = $21.11
- Contribution margin = 47.50 − 21.11 = $26.39 per order
- Monthly fixed costs = 39 + 30 + 300 = $369
- Break-even orders = ⌈369 ÷ 26.39⌉ = 14 orders/mo
- Break-even revenue = 14 × 47.50 = $665
Answer: 14 orders/mo · ~$665 in revenue · $26.39 contribution per order
How it works
Why contribution margin matters more than gross margin: gross margin tells you what's left after COGS, but Shopify charges processing on every order and your monthly bill keeps ticking whether you sell 0 or 500 units. Contribution margin — what's actually left after every per-order cost — is the dollar amount each sale puts toward covering the plan, apps, and ad spend.
Fixed costs are the silent break-even killer. A $30/mo app you forgot about adds roughly one extra order per month to your break-even. A $500/mo ad budget adds about 19 orders/mo on a $26 contribution margin — meaning ads have to pay for themselves before the store sees a cent of profit.
What to do with the result: if your real monthly orders are above break-even, the store is profitable and every order beyond it is contribution-margin profit. If you're below, you have three levers — raise net price (pricing, lower discounts, free-shipping thresholds), lower variable cost (COGS, shipping, gateway), or lower fixed cost (kill apps, cut ad budget). Pricing changes usually move the number fastest.
This calculator pairs with the Shopify Profit, Pricing, and ROI Calculators — break-even tells you the threshold, those tools tell you how much you keep above it.
Common mistakes
- Treating gross margin as contribution margin — gross margin ignores processing fees and refund reserves, which always understate break-even.
- Forgetting that ad spend is a fixed cost from the store's view — if you commit to $1,000/mo of ads, that's $1,000 of break-even regardless of how many sales the ads produce.
- Ignoring discount stacking — site-wide 15% off plus a welcome 10% code can push a healthy 30% margin down to a break-even product.
- Using Shopify Payments rates while still paying a third-party gateway transaction fee — set the Shopify transaction % to 0 only if you're on Shopify Payments.
- Calculating break-even on revenue but planning ads on units — always reconcile back to orders, since fixed costs are paid in orders × contribution margin.
- Skipping a refund reserve — even a 2–4% return rate quietly raises break-even on physical-product stores.
Related Guides
Go deeper with plain-English guides on the same topic.
What Is a Good Profit Margin?
What counts as a healthy profit margin — and how it changes depending on what you sell and where.
Read guide →What Is A Good Profit Margin? Complete Small Business Profit Margin Guide
A 2026 profit margin guide — gross vs net vs contribution, what counts as a good margin, healthy benchmarks by industry and platform, formulas, and improvement strategies.
Read guide →Pricing Psychology Explained: 25 Strategies That Increase Sales
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Read guide →How to Price Handmade Products
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FAQ
- What is a Shopify break-even point?
- It's the number of orders (or revenue) per month at which the store's total profit equals zero — your variable costs are covered, your Shopify plan, apps, and ad spend are paid, and the next order is the first one that contributes to take-home profit.
- Why is contribution margin used instead of profit margin?
- Profit margin includes fixed costs averaged across all sales, which depends on how many sales you make. Contribution margin is a constant dollar amount per order — it tells you exactly how many orders you need to cover any given fixed-cost figure, regardless of volume.
- Should ad spend be a fixed or variable cost?
- If you commit to a monthly ad budget (e.g. $500/mo on Meta), it's effectively a fixed cost and belongs in the fixed-costs section. If you only run ads on a per-product CAC basis, treat that CAC as part of variable cost. This calculator uses the monthly-budget model, which matches how most Shopify stores actually run paid traffic.
- How do I lower my break-even orders?
- Raise net price (bundles, higher AOV, fewer discounts), reduce variable cost (cheaper COGS, lower shipping, Shopify Payments instead of a third-party gateway), or reduce fixed cost (audit apps, pause underperforming ad sets). Pricing and app audits usually shift break-even fastest.
- Does this include Shopify subscription tiers?
- Yes — enter the actual plan cost (Basic $39, Shopify $105, Advanced $399, or Plus). On Basic, also set the Shopify transaction % to 2% if you're not using Shopify Payments. On Shopify it's 1%, on Advanced 0.5%, and 0% on any tier when using Shopify Payments.
- Is break-even the same as profitability?
- No. Break-even is zero profit — you're not losing money but you're not making any either. To be profitable, you need to sell consistently above break-even. Most stores aim for at least 1.5–2× break-even orders/mo so a slow month doesn't put them in the red.
- Can I use this for dropshipping?
- Yes. Set COGS to the supplier price (including any per-order packaging fee), shipping cost to the supplier's shipping fee, and shipping charged to whatever you collect from the customer. The contribution margin formula is identical for dropshipping, POD, and held-inventory stores.
- How is this different from the general Break-Even Calculator?
- The general Break-Even Calculator solves one-time investment break-even (e.g. recover a $300 startup cost at $15 profit per sale). The Shopify version handles recurring monthly fixed costs and the percentage-based processing and refund mechanics specific to a Shopify storefront.
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Shopify Fee Calculator
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Break-Even Calculator
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