Answer in brief
Contribution per order = salePrice − (productCost + fulfillmentCost + salePrice × feePercent ÷ 100 + feeFixed + acquisitionCost). The target is fixedMonthly + launchCost ÷ 12; break-even orders round target ÷ positive contribution up to a whole order.
Choose a consistent unit: the order
The calculator models one average order, not one product unit. salePrice is the amount of sales revenue you choose to attribute to that order in a single currency. If orders contain different baskets or discounts, use a representative average and identify the period. productCost is the goods cost attached to that order. Shopify's official profit-report guidance depends on product costs being recorded and treats discounts and refunds in net sales; this supports using clean records, but its reports are not the same as this simplified decision model.
fulfillmentCost covers the merchant's per-order handling and shipping expense included in your chosen boundary. If the buyer pays for shipping, make sure salePrice and fulfillmentCost treat that income and expense consistently; the tool has no separate shipping-revenue box. Do not subtract a supplier charge twice. Record whether taxes are excluded from revenue and costs, since the calculator does not perform tax accounting.
Translate the ten inputs into contribution
The inputs are launchCost, fixedMonthly, salePrice, productCost, fulfillmentCost, feePercent, feeFixed, acquisitionCost and expectedOrders. The percentage payment fee per order is salePrice × feePercent ÷ 100, rounded to four decimal places. variablePerOrder adds productCost, fulfillmentCost, that percentage fee, feeFixed and acquisitionCost. contributionPerOrder is salePrice minus variablePerOrder. Stripe's official pricing explains that transaction fees depend on payment method and agreement; this article's percentage is an assumption to replace with your actual terms.
acquisitionCost is the amount of marketing expense attributed to an order. Google Ads describes cost per conversion, but an ad conversion is not necessarily a fulfilled order. Reconcile campaigns with actual orders and include the acquisition channels you mean to evaluate. If some orders are organic, use a documented blended average when appropriate. The model does not infer attribution or calculate acquisitionCost from a campaign budget.
How the order threshold and profit outputs differ
monthlyTargetCost equals fixedMonthly + launchCost ÷ 12. Dividing this target by positive contributionPerOrder and rounding up gives breakEvenOrders. The launch allocation is a planning convention for a twelve-month recovery target, not a second cash charge each month. If the contribution is zero or below and the target is positive, no finite order count can break even. The calculator returns a null threshold in that case, rather than promising that volume solves a loss-making order.
expectedOrders drives a different set of outputs. monthlyRevenue = expectedOrders × salePrice; monthlyVariableCosts = expectedOrders × variablePerOrder; monthlyProfit = revenue − variable costs − fixedMonthly. firstYearProfit = 12 × monthlyProfit − launchCost, assuming twelve identical months. Therefore monthlyProfit can be positive even if the launch-inclusive first-year result remains negative. Keep these two time horizons distinct.
Worked example using the calculator values
For arithmetic only, assume launchCost $2,400 and fixedMonthly $850. Let salePrice be $65, productCost $22, fulfillmentCost $6, feePercent 3%, feeFixed $0.30 and acquisitionCost $10. All are fictional planning inputs, not a payment processor's price, a store's sales or an industry average. The percentage payment fee is $65 × 0.03 = $1.95. variablePerOrder is $22 + $6 + $1.95 + $0.30 + $10 = $40.25. contributionPerOrder is $65 − $40.25 = $24.75.
monthlyTargetCost is $850 + $2,400 ÷ 12 = $1,050. Since $1,050 ÷ $24.75 is about 42.42, the break-even target is 43 whole orders. At 42 orders, contribution is $1,039.50, short of the $1,050 target; at 43 it is $1,064.25. The upward rounding is essential: a fraction of an order cannot be sold in this model.
Read the expected-orders scenario correctly
Now set expectedOrders to a hypothetical 100 per month. monthlyRevenue is 100 × $65 = $6,500 and monthlyVariableCosts are 100 × $40.25 = $4,025. After fixedMonthly of $850, monthlyProfit is $1,625. firstYearProfit is 12 × $1,625 − $2,400 = $17,100. The $2,400 launch amount is not subtracted from monthlyProfit; it is subtracted once in the first-year output. This example assumes every month looks like the selected month.
At the break-even target of 43 orders, monthlyProfit is $1,064.25 − $850 = $214.25. Twelve such months less $2,400 launch yield $171, just above zero. At 42 orders the corresponding first-year result is negative. These are illustrations of the formula, not predictions of demand or a guarantee of profit.
Returns and other exclusions matter
The implemented fields do not contain a returns allowance, refund rate, chargeback cost, tax rate, marketplace commission or inventory financing cost. Returns are explicitly not modeled. A store with meaningful refunds may earn less than the displayed contribution and need more orders than the threshold. Calculate a separate scenario outside the widget using actual returns experience; do not claim that a fictitious ‘returns’ input exists. If another fee can be expressed within feePercent or feeFixed, disclose the grouping and check it is not already included.
Fixed expenses also need a clear boundary. fixedMonthly may include rent, subscriptions and recurring salaries if you enter them, but the tool does not add anything automatically. Cash tied up in unsold stock, seasonal demand, ad scaling and taxes are outside this simple order model. Compare a conservative and an expected scenario, update unit costs from invoices, and inspect whether the average order is still representative.
Practical checklist
- Use one currency and define the average sale represented by one order.
- Enter product and fulfillment costs without counting any item twice.
- Use your applicable payment fee percentage and fixed fee, not a generic rate.
- Estimate acquisition cost per order and monthly fixed expenses from records.
- Enter launch cost, expected orders, and disclose returns and other exclusions.
Questions and answers
Are returns included in the calculator?
No. It has no return, refund or chargeback field. Estimate their effect separately before treating the order threshold as a business-wide break-even target.
Why is launch cost divided by twelve?
The implemented break-even target spreads launchCost over twelve months for planning. monthlyProfit excludes that launch allocation; firstYearProfit subtracts launchCost once from twelve identical months.
What if contribution is zero or negative?
A positive cost target cannot be reached by selling more orders at zero or negative contribution, so the calculator returns no break-even order count. Revisit pricing and variable costs.