Break-Even Unit Price Calculator: Price To Cover Every Cost

Sean Flannigan

on Aug 20, 2025

QUICK SUMMARY

Find your minimum per-unit price. Enter variable cost, fixed costs, and expected units—then add a target margin. Get a price that actually covers costs, with links to model fees and discounts.

You don’t guess a price. You build it. This calculator gives you the minimum per-unit price to cover what the product costs, what your operation adds, and what returns typically take out.

How To Use This Break-Even Unit Price Calculator

Enter your unit cost—what it takes to make or buy one unit.
Enter fixed overhead per unit—your allocation of rent, utilities, salaried labor, software, etc.
Enter average returns cost per unit—shipping, restocking, and refunds spread across sales.
Click Calculate break-even price.
Review the result, then decide if you need additional margin on top.

Formula Explained

This tool models break-even at the unit level. No volume gymnastics.

Break-even unit price = Unit cost + Fixed overhead per unit + Average returns cost per unit

If you also want to cover card fees or add margin, expand the math:

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Cover card fees: Target price = (Break-even + per-transaction fee) ÷ (1 − fee %)

Reality-check fees with the Payment Processing Fee Calculator.

Add profit margin: Target price = Break-even ÷ (1 − margin %)

Keep conversions straight with the Margin Markup Calculator.

Example: LumiNourish SKUs

Let’s price two products from LumiNourish, our fictional nutraceutical brand.

Omega-3 Softgels (60ct)

Unit cost: $8.20
Fixed overhead per unit: $1.10
Average returns cost per unit: $0.40
Break-even unit price: $8.20 + $1.10 + $0.40 = $9.70
Want a 40% margin? $9.70 ÷ (1 − 0.40) = $16.17

Collagen Powder (300g)

Unit cost: $6.90
Fixed overhead per unit: $0.95
Average returns cost per unit: $0.30
Break-even unit price: $6.90 + $0.95 + $0.30 = $8.15

Plan a 25% off promo later? Run the price through the Discount Impact Simulator to confirm margin holds.

What To Include In Costs

You get a solid price only if the inputs match reality. Start conservative, then tighten as data improves.

Unit cost. Direct product cost, packaging that ships with every unit, and any unit-level freight-in.
Fixed overhead per unit. Allocate honestly. Spread rent, SaaS, salaried labor, insurance, and baseline utilities across expected units for the period.
Average returns cost per unit. Include the messy parts. Labeling, return shipping subsidies, restocking time, and disposal/write-off.
Fees and discounts. Bake them in. If your channel takes 3% + $0.30 or you run frequent promos, model those with the calculators linked above before you set a floor.

Pro Tips To Put The Number To Work

This is where break-even becomes an operating lever—not just a figure on a page.

Pressure-test scenarios. Build base, conservative, and stretch versions. Price to survive the conservative one.
Segment by channel. Wholesale, marketplace, and DTC carry different fees and return rates—set different floors.
Guardrail in your POS/ERP. Set a per-SKU margin floor so promos or manual overrides don’t cross it. If you’re upgrading systems, start with the best retail POS system.
Reduce the inputs. Negotiate processor rates, trim per-txn fees, and buy smarter. Better costs beat higher prices—see our inventory optimization software picks.
Revisit quarterly. Costs, fees, and return rates drift. Update allocations and re-price with fresh data.

Bottom Line

Use the tool, get the floor, and then set a target price that clears fees and margin with room to breathe. Recheck after launch and after every promo. Price should be a decision, not a habit.

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