Planned order cargo versus the exact sold-unit thresholdMOQ and planned quantity remain supplier decisions; the green gate is the economic requirement
Business
Supplier Order Break-Even Calculator
Reverse-solve a supplier commitment from the economics of units actually sold. Supplier price, freight, duty, defects, marketplace fees, fulfillment, expected sell-through, markdown recovery, holding cost, and fixed sourcing costs determine contribution per sale, break-even sold units, gross units that must be ordered, break-even sell-through for the MOQ, margin of safety, and capital at risk.
Break-even sold units-
Required ordered units-
MOQ break-even sell-through-
Contribution / full-price sale-
Planned sold units-
Planned order profit-
Margin of safety-
Order decision-
Supplier break-even dock
Separate ordered cargo into defects, full-price sales, and leftover recovery
Expected full-price salesLeftovers and defectsBreak-even gate
| Sell-through | Full-price units | Leftovers | Sales proceeds | Recovery value | Total variable contribution | Profit after fixed cost | Break-even? |
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Supplier commitment decision
Test the MOQ against sellable yield and realistic sell-through
- Enter the supplier MOQ, planned order quantity, and cash landed cost for every ordered unit.
- Remove defects to identify the good units available for full-price sale or leftover recovery.
- Calculate net proceeds after selling fees and fulfillment for units sold at full price.
- Assign a conservative recovery value and holding or disposal cost to leftover good units.
- Reverse-solve the order quantity and MOQ sell-through required to repay fixed sourcing and launch costs.
Break-even symbols
Physical yield, commercial sell-through, and fixed cost are separate gates
Detailed calculation process
Build profit per ordered unit before dividing fixed cost
Good-rate = 1 - zNet full-price proceeds = P * (1 - f) - fulfillmentNet leftover recovery = P * recovery rate - holding cost Profit per ordered unit = Good-rate * [s * net sale + (1 - s) * net recovery] - CRequired ordered units = F / profit per ordered unitBreak-even sold units = Required ordered units * Good-rate * s MOQ break-even sell-through = [C + F / Q_min - Good-rate * R] / [Good-rate * (Net sale - R)]Planned profit = full-price proceeds + leftover recovery - purchase cash - F Worked default commitment
The 2,400-unit plan is below break-even at 72% sell-through
The default has a 1,800-unit MOQ, $12.05 landed cash per ordered unit, 3.5% defects, a $31.50 selling price, 16% selling fee, $4.10 fulfillment, 72% sell-through, $7.57 net leftover recovery, and $16,500 fixed sourcing and launch cost.
Net full-price proceeds = $31.50 * 0.84 - $4.10 = $22.36Good-rate = 1 - 0.035 = 0.965Net leftover recovery = $31.50 * 0.28 - $1.25 = $7.57 Profit per ordered unit = 0.965 * [0.72 * $22.36 + 0.28 * $7.57] - $12.05 = $5.53Required ordered units = $16,500 / $5.53 = 2,983.1Break-even sold units = 2,983.1 * 0.965 * 0.72 = 2,072.7 The planned order sells about 1,667.5 units and produces approximately -$3,225 after fixed cost. The MOQ itself would require about 97.5% sell-through to break even, so the correct response is to improve economics or reconsider the fixed launch burden—not merely order the minimum.
Negotiation levers
Change the gate that actually binds
- Amortize tooling over a documented multi-order commitment
- Negotiate MOQ separately from unit quote
- Reduce defects with pre-shipment inspection
- Secure channel placement before ordering
- Model liquidation proceeds from comparable inventory
Break-even limitation
Sell-through is not a cash-timing forecast
The model does not schedule sales, supplier deposits, collection lag, storage-duration changes, markdown timing, repeat orders, taxes, or currency movements. Use the supplier order forecast for timing and a cash-flow plan for liquidity.
Supplier order break-even FAQ
Questions about MOQ, leftovers, and fixed cost
Can ordering more units solve a negative profit-per-unit problem?
No. When expected profit per ordered unit is non-positive, larger orders increase the loss before fixed cost.
Why include leftover recovery?
Unsold good inventory usually has some economic outcome; explicit recovery is more honest than valuing it at full price or zero without explanation.
Should fixed sourcing cost be spread over future orders?
Only when a defensible purchasing plan commits to those orders. Otherwise test the first order on the fixed cash it must actually recover.
Practical examples
Supplier Order Break-Even Calculator in real planning situations
- Check whether a supplier MOQ can repay tooling and compliance costs.
- Measure the break-even effect of lower sell-through.
- Compare full-price contribution with markdown recovery on leftover stock.
Important note
Before relying on this result
Calculated from the entered values using the displayed accounting method. Reconcile material decisions with source records and applicable accounting policy.
Additional Supplier Order Break-Even Calculator questions
Why is MOQ not automatically the order recommendation?
MOQ is a supplier constraint; it can be below or far above the economic break-even quantity.
What happens to unsold units?
The model assigns the entered markdown recovery and holding cost rather than pretending unsold stock has no value or cost.
When is break-even infeasible?
It is infeasible when realized contribution per sold unit is non-positive or the required sell-through exceeds 100%.