Chartered Financial Analyst specializing in e-commerce and creative entrepreneur finance.
Determine how many sales your Etsy shop must make each month to cover all costs. Enter any three variables—Monthly Fixed Costs, Avg. Price per Sale, Variable Cost per Sale, or Breakeven Sales—to solve for the fourth.
Etsy Seller Breakeven Calculator
Etsy Seller Breakeven Formula
The breakeven formula for an Etsy seller finds the number of sales (Q) they must make for total monthly revenue to equal all fixed and variable costs.
Q = F / (P – V)
Solve for Monthly Fixed Costs (F):
F = Q * (P – V)
Solve for Avg. Price per Sale (P):
P = (F / Q) + V
Solve for Variable Cost per Sale (V):
V = P – (F / Q)
Variables Explained
- Monthly Fixed Costs (F): Your total, recurring monthly overhead (e.g., Etsy Plus subscription, software, internet, studio rent).
- Avg. Price per Sale (P): Your average revenue from one sale (including shipping charged to the customer).
- Variable Cost per Sale (V): The direct costs per sale (e.g., materials, shipping, transaction fees, listing fees, ad fees).
- Breakeven Sales (Q): The total number of sales needed to reach $0 in monthly profit.
Related Calculators
- E-commerce Breakeven Calculator
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- Retail Breakeven Calculator
- Shipping Cost Calculator
What is an Etsy Breakeven Point?
An **Etsy Breakeven Point** is the number of sales a seller must make each month to cover all their business-related costs. It is the critical milestone where the shop stops losing money and begins to generate a profit.
**Fixed Costs (F)** are your monthly operational expenses, or “overhead.” These are costs you pay regardless of how many sales you make. For an Etsy seller, this includes your Etsy Plus subscription, any software (e.g., Adobe, accounting), studio rent, and marketing budgets not tied to specific sales.
**Variable Costs (V)** are costs incurred *specifically for each sale*. This is the most complex part for Etsy. It includes raw materials, packaging, shipping costs, Etsy transaction fees, payment processing fees, listing fees (the $0.20 is a variable cost), and any off-site ad fees. The **Contribution Margin** (P – V) is your net profit from one sale, which then goes to pay down your fixed costs.
This calculator helps you find the number of sales, each contributing this margin, needed to cover your total monthly overhead. Any sales *after* this breakeven number generate your net profit.
How to Calculate Etsy Breakeven (Example)
Let’s calculate the breakeven point for a small Etsy shop.
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Identify Monthly Fixed Costs (F):
The seller has $500 in monthly software subscriptions, internet, and craft supplies (bulk).
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Identify Avg. Price per Sale (P):
The average product sells for $35.
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Identify Variable Cost (V):
Each sale costs $10 in materials, shipping, and Etsy fees (transaction, processing, listing).
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Apply the Formula: Q = F / (P – V)
First, calculate the contribution margin per sale: $35 (P) – $10 (V) = $25.
Next, divide the fixed costs by this margin:
Q = $500 / $25 = 20 -
Conclusion:
The Etsy seller must make 20 sales each month to cover all costs and start making a profit.
Frequently Asked Questions (FAQ)
The $0.20 listing fee is a **Variable Cost (V)** because you pay it *per item* you sell (or renew). The $10/mo “Etsy Plus” subscription, however, is a **Fixed Cost (F)**.
If you charge the customer for shipping, add that charge to your **Avg. Price (P)**. Then, add the *actual* cost you pay for shipping (postage + materials) to your **Variable Cost (V)**.
Etsy’s Off-site Ads fee (12-15%) is a perfect example of a **Variable Cost (V)**. You should calculate your average (V) to include this percentage cost.
This is the best use! Set your (F) (e.g., $500), (V) (e.g., $10), and a realistic sales target (Q) (e.g., 20 sales). Solve for (P) to find your minimum price: `P = ($500 / 20) + $10 = $25 + $10 = $35`. You must charge at least $35 per item.