How the Launch Break-even Calculator works
Break-even on a launch is the moment cumulative profit equals what you invested. Until then the product is consuming cash, however good the margin looks.
Divide the investment by profit per unit for the units required, and by monthly profit for the time required. Growth shortens it; a slow start lengthens it.
Formula
- Units to break even = Startup investment ÷ Net profit per unit
- Revenue to break even = Units × Selling price
- Months to break even = first month where Σ (Units per month × Profit per unit) ≥ Investment
Example
856 units ($23,960 in revenue) recover the launch; at 150 units/month growing 10% that takes about 5 months.
Startup investment: 7275Net profit per unit: 8.5Selling price: 27.99Projected units per month: 150Monthly growth %: 10
Frequently asked questions
Should I use launch-phase or steady-state profit?
Steady-state for the units figure; but remember the first units earn less because of launch PPC, so real payback is a little longer than shown.
What payback period is acceptable?
Under 6 months is excellent, 6–12 months is normal for private label, beyond 12 months is risky given how quickly Amazon niches change.