Question 1

What is a break-even price?

Accepted Answer

A break-even price is the minimum amount you must charge to cover all your costs and fees, resulting in zero profit. It includes your product cost, variable fees (like marketplace commissions), fixed fees (like transaction charges), taxes on fees, and any other per-unit costs. Selling at or above this price ensures you don't lose money on each sale.

Question 2

How do I calculate my break-even price?

Accepted Answer

The break-even formula accounts for variable fees that scale with your selling price. The calculation is: Break-Even Price = (Total Cost + Fixed Fees) / (1 - Variable Fee Rate). This formula ensures that even after deducting percentage-based fees from your selling price, you still cover all your costs.

Question 3

What are variable fees vs fixed fees?

Accepted Answer

Variable fees are charges calculated as a percentage of your selling price, such as marketplace commissions (e.g., Shopee's 6%) or payment gateway fees (e.g., 2.5%). Fixed fees are flat charges per transaction regardless of the sale amount, such as Shopee's RM2 transaction fee. Both types of fees affect your break-even calculation differently.

Question 4

Why do taxes on fees matter for break-even calculation?

Accepted Answer

In Malaysia, SST (Sales and Services Tax) at 6% is applied to marketplace fees and payment gateway charges. This means your actual fee costs are higher than the base rates. For example, a 10% commission with 6% SST becomes effectively 10.6%. Our calculator factors in this tax to give you an accurate break-even price.

Question 5

What profit margin should I add above break-even?

Accepted Answer

Most successful e-commerce sellers aim for 15-25% profit margins above their break-even price. Our calculator shows scenarios at 5%, 10%, 15%, and 20% margins so you can choose a sustainable pricing strategy. Consider your market competition, product category, and business goals when selecting your target margin.

Question 6

Is this calculator free to use?

Accepted Answer

Yes, our break-even price calculator is completely free to use. No signup is required, you get instant results, and your data stays private - all calculations happen in your browser without being sent to any server.

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