Work from a single sale
Suppose you charge 40 currency units, spend 15 on direct delivery and pay a processing fee of 3% of revenue. One sale contributes 40 − 15 − 1.2 = 23.8 units.
That 23.8 is not net profit. It must still cover rent, software, fixed payroll and other monthly overheads.
Calculate break-even
If monthly fixed costs are 1,300 units, you need about 55 sales to break even: 1,300 divided by 23.8, rounded up.
At 100 sales, revenue would be 4,000 units and estimated pretax operating profit would be 1,080. This is an arithmetic example, not a market forecast.
Include overlooked costs
Returns, discounts, defects, advertising, taxes, seasonality and unpaid founder hours can meaningfully change the calculation. Test several scenarios instead of relying on the most optimistic one.
Cash flow deserves separate attention. Paper profit does not guarantee that you can pay suppliers on time.
Use realistic inputs
The MoneyRadar homepage calculator applies these principles: unit price, variable costs, fees, monthly fixed costs and break-even volume. Use your own verified assumptions.
If contribution per sale is zero or negative, higher volume will not cover positive fixed expenses. You must revise pricing or costs.
See also our guide to margin and markup for formulas and examples.