---
title: "Break-even price: definition, formula and example"
description: "The lowest price at which an order still covers its own costs. Below it, every sale loses money before any fixed cost is counted."
url: https://offersuite.io/glossary/break-even-price
updated: 2026-10-13
---

# Break-even price

The lowest price at which an order still covers its own costs. Below it, every sale loses money before any fixed cost is counted.

## In plain words

The break-even price is the price at which an order's contribution margin is exactly zero. It is the floor under every discount: sell below it, and each order costs more to make and ship than it brings in.

It is higher than the product's cost, often much higher. The floor has to cover fulfilment, the label and the fixed card fee, and then be raised again, because some costs are a share of the price itself and take their cut of every dollar.

## Formula

- Break-even price = costs that do not depend on price ÷ (1 − costs charged as a share of price)

## Worked example

The coffee bag costs $12.00 to buy. The engine's solver puts its break-even price at $23.33, almost twice that: at this price the order keeps $0.00.

One dollar lower, the engine puts the order at −$0.92. A 40% discount on the $40.00 bag would sell it for $24.00, barely above the floor.

### The example order

A $40.00 bag of coffee, shipped free, every cost counted

Revenue $40.00 to contribution margin $15.36 (38.4%)

Revenue

$40.00

Cost of goods

−$12.00

Pick and pack

−$1.18

Packaging

−$0.50

Shipping label

−$7.50

Card fee per order

−$0.30

Refunds

−$2.00

Card processing

−$1.16

Contribution margin

$15.36

2 declared kinds cost nothing on this option

Computed by the margin engine in Offer Suite's own code, in whole cents, from a $40.00 bag of coffee with a $12.00 unit cost.

## The break-even price is not the unit cost

Selling at cost loses the whole of fulfilment, shipping and fees on every order. The unit cost is the floor for gross margin only. For an order that ships, the floor is the price at which contribution margin reaches zero.

## Using it

Work it out per option, with the shipping the customer pays included as revenue. Then check every promotion against it, including the stacked case where a sale price meets a subscription discount or a code. An offer can sit above the floor on its own and fall through it once two discounts combine.

## In Offer Suite

Offer Suite's simulator solves for a subscription's first-order price the same way: it moves one input, holds the rest and checks the answer against the projection it came from. When no price reaches the goal it says why, and gives no nearest guess.

Source: Offer Suite's margin engine.

## Related

- [Glossary **Glossary of offer economics** The terms behind offer profit, defined plainly with their formulas and a worked number: contribution margin, profit per visitor, break-even lift and more.](https://offersuite.io/glossary)
- [Calculator **Bundle pricing calculator: shipping, subscriptions** Price a bundle against a single unit, one-time and subscribed, with the shipping and pick costs it saves, and the conversion it can lose and still earn as much.](https://offersuite.io/calculators/bundle-pricing)
- [Calculator **Offer option calculator: profit per visitor** Compare up to three offer options on profit per visitor, margin per order times conversion, and see the conversion lift each one needs to match the best.](https://offersuite.io/calculators/offer-option-profit-per-visitor)
- [Glossary **Contribution margin: definition and formula** What an order keeps after every cost that grows with it: product cost, fulfilment, shipping, card fees and refunds. The number an offer should be judged on.](https://offersuite.io/glossary/contribution-margin)
- [Glossary **Percentage discount: definition and formula** A share taken off the price. It comes off revenue in full while most costs stay put, so it removes a much larger share of the margin.](https://offersuite.io/glossary/percentage-discount)
- [Glossary **Discount stacking: definition, formula and example** Two or more discounts applying to one order: a sale price, a subscription discount, a code. Each looked affordable alone; together they may not be.](https://offersuite.io/glossary/discount-stacking)