How this calculation works
Refunds reverse sale revenue and its modeled fee, while delivery cost is incurred for every original order. Multiply expected contribution per original order by the order count and subtract fixed launch cost. Break-even rounds up to whole original orders when contribution is positive.
Unit contribution = price × (1−refund share) × (1−fee) − unit costA worked example
At 500 price, 10% refunds, 5% retained-revenue fee and 20 cost, contribution is 407.5 per original order. For 100 orders less 5,000 fixed cost, profit is 35,750.
Good to know
A transparent arithmetic model using your inputs. Example prices, rates and multiples are demonstrations, not benchmarks or offers. No tax, exchange-rate conversion, live account access or automatic attribution is supplied. Monetary display is rounded; calculations retain additional precision.
A refunded order may still cost something
The model reverses the selling price and its percentage fee for a fully refunded order, but keeps the per-original-order cost. That distinction matters when support, fulfillment or another cost is incurred before a refund occurs.
If the payment processor keeps fees on refunds, this model’s fee reversal is not the right description of that arrangement. Match the cost assumptions to the actual offer rather than assuming every refund restores the original position.
The break-even quantity depends on positive unit contribution and fixed costs. Refunds and fees change that contribution before a meaningful break-even count can be calculated.
Positive contribution is needed to recover a fixed launch cost
Contribution per original order is the expected retained revenue after modeled percentage fees minus the per-order cost. Fixed launch cost is then recovered from that contribution. Dividing only by the selling price would overstate how quickly the launch pays for itself.
Break-even rounds upward to whole orders. With positive fixed cost and nonpositive contribution, selling more orders cannot reach break-even in this model. Changing price, costs, fees or refunds is a different scenario, not an automatic consequence of more traffic.
A few questions, answered
Are the refund and fee rates added together?
No. Refund share reduces revenue first, then the modeled fee applies to the retained revenue.
Does it model an inventory purchase?
No. Per-order cost is incurred on original orders here. Inventory timing, prepaid stock and cash flow need another model.