Breakeven

If you have a big idea, at some point you are going to want to make stuff, some sort of swag or actual product. (Hopefully you will only be selling something non-material like a ticket or a download.) Regardless of what you make or whether you want to make a profit, you need to know your breakeven point. How many units do you need to sell to offset the costs of each unit (variable costs) and that unit’s share of the overall costs (fixed costs). 

Here’s a tool to make the calculation…

http://www.dinkytown.net/java/BreakEven.html

Here is an explanation of the formulas involved if you want to do it yourself:

http://knol.google.com/k/break-even-education

You can avoid the break-even problem by eradicating the fixed costs. You do this through on-demand ordering. The product is only created when it is ordered. You only pay for the vendors costs (variable) when you make a sale. The downside is the increased cost for your customers and narrow margins for you. Here’s a service that you can use: http://www.cafepress.com

Here is a link to my cafe press store: http://www.cafepress.com/justbeplatypus