How to Calculate Your Break-Even Point on Imported Products

Don't Scale Until You Know Your Break-Even

Every import venture involves upfront costs — product samples, production, shipping, duties, compliance testing. Your break-even point tells you exactly how many units you need to sell before those costs are covered and you start making profit.

The Break-Even Formula

Break-even units = Total fixed costs ÷ Contribution margin per unit

Where:

• Fixed costs = all one-time costs for this product launch
• Contribution margin = Selling price − Variable cost per unit

Step 1: Calculate Your Fixed Costs

These are costs you pay regardless of how many units you sell:

Step 2: Calculate Your Variable Cost Per Unit

This is what each unit costs you to source, import, and sell:

Use LandedCost.io's cost engine to calculate your exact landed cost, then add your selling fees.

Step 3: Calculate Contribution Margin

Contribution margin = Selling price − Variable cost per unit

Example: $24.99 − $16.52 = $8.47 per unit

Step 4: Calculate Break-Even

Break-even = Fixed costs ÷ Contribution margin

If your fixed costs are $2,500:

$2,500 ÷ $8.47 = 296 units

You need to sell 296 units to cover all your startup costs. Every unit after that is profit.

What Your Break-Even Number Tells You

Reducing Your Break-Even Point

Lower your fixed costs

• Use your phone for initial product photos (upgrade later)
• Skip custom packaging for the first order
• Start with compliance essentials only

Increase your contribution margin

• Negotiate a lower FOB price
• Choose sea freight over air freight
• Reduce packaging dimensions to lower FBA fees
• Test a higher selling price

Do both

Small improvements in both areas compound. Reducing fixed costs by 20% AND increasing margin by $1 per unit can halve your break-even point.

Beyond Break-Even: Payback Period

Break-even tells you how many units. Payback period tells you how long:

Payback period = Break-even units ÷ Monthly sales velocity

If you break even at 296 units and sell 80 per month: 296 ÷ 80 = 3.7 months to payback

Aim for a payback period under 6 months for a healthy import business.

Track It All

Use LandedCost.io's profitability tools to model your break-even before ordering, and track your actual performance against projections across every shipment.