Find how many units you need to sell to cover costs. Essential for FMCG distributors planning new product lines or a new beat.
Break-even is the sales volume where contribution (price minus variable cost) exactly covers fixed costs: BEP units = Fixed costs ÷ (Price − Variable cost per unit). Below it every unit sold still loses money; above it, each unit's full contribution is profit.
For a distributor, 'fixed' means godown rent, staff salaries, vehicle EMIs and software; 'variable' is the landed cost of goods plus per-delivery fuel. Knowing break-even per month tells you the minimum billing you must chase before the 20th.
Fixed: rent, salaries, insurance, vehicle EMI, subscriptions. Variable: cost of goods, delivery fuel per order, transaction fees. Salesman incentives tied to sales are variable; their base salary is fixed.
Work it in reverse: at your realistic monthly volume, the price must leave enough contribution to clear fixed costs plus target profit. If a brand's scheme pushes your margin below that contribution, the line is subsidising your competitors.
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