How many orders
until you break even?
Fixed costs divided by what one order contributes. The answer is usually a smaller number than founders fear, or a much larger one.
Your numbers
Your blended AOV.
Landed product cost as a share of AOV.
Shipping, packaging, fees, marketing, returns drag.
Salaries, rent, software, retainers.
Orders a month
——
Estimates from the figures you entered. Treat them as a directional model of your own economics, not an audited result.
Break-even, in orders
Break-even is the point where total contribution covers total fixed cost. Expressing it in orders per month rather than rupees makes it far more usable — it becomes a target the whole team can see against a dashboard.
Break-even orders = fixed cost ÷ contribution per order
Getting the split right
The calculation is only as good as the classification. Fixed costs do not move with order volume: salaries, rent, software subscriptions, agency retainers. Variable costs scale with each order: goods, shipping, packaging, payment fees, performance marketing, and the returns drag spread across every order.
The most commonly misplaced line is marketing. Brand and retainer spend is fixed; performance spend that rises with volume is variable. Putting it all in the wrong bucket will move your break-even point by a long way.
Two ways down, one of them faster
You can lower break-even by cutting fixed cost or by raising contribution per order. Raising contribution is usually faster and less painful, because small per-order improvements compound across every single order.
- ₹20 more contribution per order at ₹6 lakh fixed cost removes hundreds of orders from the target.
- Cutting the RTO rate raises contribution on every order shipped, not just the ones that would have failed. See the RTO cost calculator.
- Lifting prepaid share removes the COD handling fee and most of the returns drag at once.
Frequently asked questions
How do I calculate break-even for an ecommerce business?
Work out contribution per order — average order value minus cost of goods minus every variable cost that order causes. Then divide your monthly fixed costs by that figure. The result is the number of orders a month you need before you make a rupee of profit.
What counts as a fixed cost?
Anything that does not move when you ship one more order: salaries, office rent, software subscriptions, agency retainers, accounting. If the cost is identical whether you ship 500 orders or 5,000, it is fixed.
Should marketing be fixed or variable?
Split it. Retainers and brand spend that stay flat month to month are fixed. Performance spend that scales with the orders it produces is variable and belongs in contribution per order. Lumping it all together is the most common source of a wrong break-even number.
Why does my break-even point keep moving?
Usually because contribution per order is moving, not because fixed costs changed. Shifts in discount depth, COD share, RTO rate, shipping mix or acquisition efficiency all change contribution, and therefore the target.
What if contribution per order is negative?
Then no amount of volume gets you to break-even — each additional order makes the loss bigger. The unit economics have to change first, through price, cost of goods, fulfilment cost or returns, before scale is the answer.
Other calculators
Fix the leak,
not the spreadsheet.
Zelly Checkout scores every order before you pack it, so the numbers above start moving on their own.