Product Viability & Breakeven Calculator
Assess product profitability before launch with MerchantFlow. Use store-level cost averages, breakeven analysis, and sensitivity modeling.
Product Viability & Breakeven Calculator
Plan availability: The Product Viability calculator is included on the Plus tier. Starter and Pro workspaces will see a tier-upgrade prompt when opening this page. The free public tool at
/tools/product-viability-calculatorremains available without a subscription.
The Product Viability Calculator in MerchantFlow is a profitability simulation tool that helps e-commerce merchants assess whether a new product will be profitable before committing to inventory. It uses your store's actual cost averages -- payment fees, ad spend rate, shipping, fulfillment, and more -- to project real-world margins, breakeven points, and sensitivity to cost changes.
What Is a Product Viability Analysis?
A product viability analysis answers the question: "Will this product be profitable at my store?" Instead of guessing, MerchantFlow pulls your actual operating costs and applies them to a hypothetical product, so you see projected margins based on real data rather than optimistic estimates.
How the Viability Calculator Works
- Enter product details (selling price, COGS, expected monthly volume)
- MerchantFlow applies your store's average cost rates automatically
- See projected margin, breakeven point, and sensitivity analysis
- Adjust variables to explore different scenarios
How to Access the Calculator
Navigate to Products > Product Viability Calculator (/dashboard/product-viability) from the main navigation.
This page does not use the global timeframe selector -- store averages are always drawn from your last 30 days of data.
What You Enter
Four product inputs drive the model:
- Selling Price - the price you intend to charge
- COGS per unit - what the unit costs you landed
- Handling cost - any per-unit handling on top of COGS
- Monthly units - the volume you expect to move each month
What Store Averages Are Used?
The calculator pre-fills your store's actual averages from the last 30 days of synced data. Every one of these is an editable field -- type over any of them to model a different assumption, and use the Reset button to snap them all back to your real store averages.
| Field | Unit | What it is |
|---|---|---|
| Payment fees | % of revenue | Payment processing fees (e.g. Stripe 2.9%) |
| Refund rate | % of revenue | Refunds as a share of revenue |
| Ad spend | % of revenue | Marketing and ad spend as a share of revenue |
| Discount rate | % of revenue | Average discount given |
| Tax rate | % of revenue | Sales tax as a share of revenue |
| Fulfillment | $ per order or % of price | Warehouse pick, pack and dispatch. A toggle switches the field between a flat dollar amount and a percentage |
| Shipping | $ per order | Carrier and postage cost to deliver the parcel |
| Monthly OPEX | $ per month | Operating expenses (rent, subscriptions, salaries) |
| Funding repay | % of revenue | Revenue-based funding repayment. Only shown when you have an active funding agreement |
Your monthly amortised CAPEX is also folded into fixed costs. It is the one figure that is not editable -- it comes straight from your expense records.
These averages update automatically as new data syncs, so your projections stay grounded in current business performance.
How the Numbers Are Calculated
Every percentage rate is applied to the selling price to produce a per-unit cost. Those are added to COGS, handling, fulfillment and shipping to give a total cost per unit:
Profit per unit = Selling price - (COGS + Handling + Payment fees + Ad spend
+ Refunds + Discounts + Fulfillment + Shipping + Tax + Funding)
Net margin % = Profit per unit / Selling price x 100Monthly figures build on that:
Monthly fixed costs = Monthly OPEX + Monthly amortised CAPEX
Monthly net profit = (Profit per unit x Monthly units) - Monthly fixed costsSimulation Features
Verdict
The calculator grades the product on net margin alone:
| Verdict | Net margin | What it means |
|---|---|---|
| Viable | 15% or higher | This product should be profitable |
| Marginal | 0% to 15% | Thin net margins - sensitive to cost changes |
| Not Viable | Below 0% | Costs exceed revenue at this price |
Per-Unit Cost Breakdown
A stacked bar splits the selling price into every cost component -- COGS, Handling, Payment Fees, Ad Spend, Refunds, Discounts, Fulfillment (pick/pack), Shipping (carrier), Tax, Funding -- plus what is left as profit.
Reverse Calculations
The Reverse Calculations card answers the "how far can I push this?" questions:
- Minimum Viable Price - the lowest price at which profit per unit reaches zero, given your COGS, handling and cost rates
- Maximum Allowable COGS - the highest unit cost you can pay at your entered price before profit hits zero. Use it as your ceiling when negotiating with suppliers
- Net Margin - the resulting margin at your current inputs
Alongside these, the KPI row shows Breakeven Units -- monthly fixed costs divided by profit per unit, rounded up -- and Required ROAS (selling price divided by ad spend per unit). Required ROAS is colour-coded: 3x or below is healthy, 3-5x is tight, above 5x means ads are hard to justify. When profit per unit is zero or negative, breakeven units shows a dash with "Not achievable at this net margin".
Sensitivity Analysis
The Sensitivity Analysis table shows how monthly net profit and net margin move when one variable shifts while everything else stays fixed. Three rows -- Selling Price, COGS and Volume -- are each swung across five columns: -20%, -10%, Base, +10%, +20%.
This reveals which lever has the most impact on profitability, so you know where to focus optimization effort.
Best Practices for Product Viability
- Run the calculator before sourcing new products - Know your margin floor before negotiating with suppliers
- Use your actual store averages for realistic projections instead of industry benchmarks
- Pay attention to the sensitivity analysis - Small changes in ad spend can flip margins from positive to negative
- Revisit viability as your store averages change over time, especially after significant operational changes
- Factor in funding costs if you plan to use revenue-based funding to finance inventory
- Compare against existing products - Use the Products Table to see how current products perform at similar price points
Frequently Asked Questions
How accurate are the viability projections?
Projections are based on your store's actual historical cost averages, which makes them significantly more accurate than industry benchmarks. However, new products may have different ad costs or return rates than your store average. Use the sensitivity analysis to model these variations.
Can I save viability analyses for future reference?
No. The calculator is entirely real-time and holds no state -- there is no save button and no export. Screenshot the analysis before navigating away if you need to keep it. Saved viability reports are on the product roadmap.
What if I do not have enough store data yet?
For new stores with limited data, the calculator may show incomplete averages, and a data-quality panel flags which inputs are thin (it wants at least 14 days of data, 10+ orders, some ad spend, and some COGS coverage). Every cost field is editable, so you can type in your best estimates. If your store has no synced data at all, the page shows a "No store data yet" empty state instead of the calculator.
How does the breakeven analysis account for fixed costs?
Breakeven units are your monthly fixed costs -- monthly OPEX plus monthly amortised CAPEX -- divided by the profit per unit, rounded up. So the figure tells you how many units of this one product it would take to cover the whole month's overhead. If profit per unit is zero or negative, no volume covers it and the tile shows a dash.
Should I use the viability calculator for existing products too?
Yes. If you are considering a price change, switching suppliers, or adjusting ad spend for an existing product, run the new numbers through the calculator to see how the change affects projected profitability.
Related Topics
- Products Table - View current product performance
- Product Detail Analytics - Deep-dive into individual products
- Expense Tracking - Understand your cost structure
- Revenue-Based Funding - Factor in funding costs
- P&L Overview - Complete financial tracking
Last updated: August 23, 2026
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