Break-even is a decision line, not a target
Your break-even price is the point where the order produces zero operating profit under the assumptions entered. It helps identify whether a proposed discount is viable, but it does not provide a safety margin for returns, demand volatility, or unexpected fee changes.
Include costs that move with price
Referral fees, digital services fees, and some taxes are commonly calculated as a percentage of a fee base. Lowering the selling price reduces some of these charges, so subtracting a fixed fee total from the original price can give the wrong answer.
- Model referral and applicable surcharges as percentages when that matches the transaction.
- Keep per-item, fulfillment, and landed product costs as fixed amounts per order or unit.
- Add the coupon discount and any redemption fee to the same scenario.
Stress-test the promotion
After finding break-even, calculate the same offer with a higher advertising cost, a returns allowance, and a conservative exchange rate. If a small change pushes the order below zero, the promotion has little room for execution risk.
Set a target-margin price too
A target-margin price is more useful for everyday pricing because it includes the profit rate the business needs. Keep break-even as the hard floor and the target-margin price as the operating goal.