Reggie thought his booth was breaking even at $400 in monthly sales because that's what his rent was. Six months later his payouts confirmed the booth had been quietly losing money the whole time. Commission, processing fees, supplies, and COGS were eating dollars that the rent number didn't see. He had been using a break-even formula too simple to be useful.
The right booth break-even formula accounts for commission and COGS as percentages of sales—because they scale with revenue—and treats rent and supplies as the fixed costs they actually are. Here's the formula, a worked example, and the line items most booth sellers forget when they do this math the first time.
Why "Rent Equals Break-Even" Is Wrong
The naive formula treats rent as the only cost:
Wrong: Break-even sales = monthly rent
That ignores the fact that every dollar of sales drags commission, processing, and COGS with it. If those three layers eat 50 cents per dollar, you need $800 in sales to net the $400 that pays rent—not $400.
The right formula treats fixed costs and variable cost percentages separately:
Break-even sales = Fixed costs ÷ (1 − Commission% − Processing% − COGS ratio)
The denominator is the share of each sales dollar that survives variable costs and is available to pay fixed costs. The numerator is what you have to cover with the surviving fraction.
The Inputs You Need
To run the right formula, gather these five inputs for one month of activity:
| Input | What it includes | Typical range |
|---|---|---|
| Monthly fixed costs | Booth rent, insurance, software, supplies budget | $200–$1,200/mo |
| Commission rate | Mall or store cut on every sale | 5–15% |
| Credit card / processing | Pass-through processing fees | 2–3% |
| COGS ratio | What you paid for items as a share of sale price | 25–50% |
| Other variable costs | Per-sale tag fees, transaction fees | 0–2% |
The COGS ratio is the input most sellers get wrong because they estimate from feel. Pull it from your inventory log—total landed cost of items sold divided by total revenue from those items, for a recent quarter.
A Worked Example
Reggie's actual numbers:
- Monthly fixed costs: $480 (rent $400, insurance + software + tags ~$80)
- Commission rate: 10%
- Processing pass-through: 2.5%
- COGS ratio: 38% (verified from his inventory log)
- Other variable: 0%
Plugging into the formula:
Break-even = $480 ÷ (1 − 0.10 − 0.025 − 0.38) = $480 ÷ 0.495 ≈ $970/month
His real break-even was almost $1,000—more than double his rent. That number explained six months of disappointing payouts.
What "Break-Even" Actually Means Here
Break-even sales = the sales level at which fixed costs are fully covered after variable costs (commission, processing, COGS) are subtracted. Below this level you are losing money. Above it, each additional sale dollar contributes 49.5 cents (in Reggie's case) to profit.
It does not include your labor. Most booth sellers don't price labor into break-even, but if you assign yourself even $15/hour for your time at the booth and sourcing, the real break-even rises further. The break-even formula tells you when the booth stops burning cash. It doesn't tell you when the booth is paying you fairly.
The Line Items Most Sellers Forget
Holiday Tag Fees
Many malls charge per-tag or per-item fees during peak. Bake into December's fixed cost line.
Sales Tax Paid at Sourcing
Tax you paid on items at the estate sale or thrift store is part of your landed cost—and therefore your COGS ratio.
Shrinkage
If 1–2% of your inventory walks out the door without selling, your effective COGS ratio is higher than your invoice math suggests. Add a shrinkage allowance.
Markdowns
The commission applies to the discounted price, but your COGS doesn't change. Your COGS ratio rises as your average sell price falls. A booth running heavy markdowns has a higher COGS ratio than its source-side math suggests.
Booth Move-In Amortization
The $200 you spent on display fixtures and the $250 security deposit aren't free. Amortize them across your expected tenure.
How Commission Changes Break-Even
For a deeper look at how commission percentages compound with rent and fees to set the real number, see How Store Commission Affects Your Bottom Line. The short version: a one-point commission swing moves break-even by 1–2% of monthly target, which over a year is meaningful real money.
Sensitivity: When the Number Changes
The break-even isn't static. It moves with:
| Change | Direction | Why |
|---|---|---|
| Higher commission | Break-even up | Less of each dollar survives |
| Lower COGS ratio (better sourcing) | Break-even down | More of each dollar survives |
| Higher rent or insurance | Break-even up | Fixed costs rise |
| Heavier markdowns | Break-even up | Effective COGS ratio rises |
| Larger booth (more rent) | Break-even up | Unless sales rise faster than rent |
| Holiday tag fees | Break-even up that month | Variable costs spike |
Run the formula quarterly. The inputs drift, and the break-even drifts with them.
What to Do If You're Below Break-Even
If your monthly sales are below the calculated break-even, you have four levers:
- Reduce fixed costs. Smaller booth, drop software subscriptions, renegotiate insurance.
- Reduce COGS ratio. Tighter sourcing discipline, source for higher resale-to-cost ratios.
- Reduce variable percentage. Negotiate a commission step-down on renewal, switch to a different mall pricing structure.
- Raise sales. Better photography, faster aging discipline, more category focus.
Most resellers reach for #4 first because it feels like progress. The math usually rewards #2 and #3 more reliably, because they change the slope of every dollar going forward.
The Operating Expense Map That Feeds the Formula
The fixed-cost number only works if you actually know your monthly operating expenses. The full category map most booth sellers benefit from tracking is in Operating Expenses Every Booth Seller Should Track. Without it, the formula uses fiction inputs and produces fiction outputs.
The Number That Changes the Decision
Reggie's $970 break-even number was the input that broke the tie between "keep the booth" and "downsize." He moved from a 12-foot booth at $400 to an 8-foot booth at $280. His COGS ratio improved with tighter sourcing focus. Within four months his real break-even dropped to about $640 and he was finally above it consistently.
The formula didn't save him money. The honest number that came out of it did. Run yours. Tape it to the wall. Make decisions against the truth.