Breakeven Price
/ ˈbrākˌēvən prīs /
1. The lowest price a company can charge for a product or service and recover all expenses without a Net Profit.
A breakeven price is determined at every calculation and empowers the salesperson to confidently defend a products value.
It is important to use the desired net profit goal if sales commission is to be paid. This method guarantees that the sales commission revenue will not put the project in debt. If sales commission is required - only rely on the breakeven price calculated at the desired net profit.
Example above
Example above
Breakeven at 0% Net Profit = $175.76 with a 5% Sales Commission of $9.09.
The breakeven is $0.00 more than $175.76 or no difference
Breakeven at 5% Net Profit = $176.67 with a 5% Sales Commission of $10.00.
The breakeven is $0.91 more than $175.76 or the difference between $10.00 and $9.09.
Breakeven at 10% Net Profit = $177.78 with a 5% Sales Commission of $11.11.
The breakeven price is $2.02 more than $175.76 or the difference between $11.11 and $9.09.
Breakeven at 15% Net Profit = $179.17 with a 5% Sales Commission of $12.50.
The breakeven price is $3.41 more than $175.76 or the difference between $12.50 and $9.09.
The breakeven is $0.00 more than $175.76 or no difference
Breakeven at 5% Net Profit = $176.67 with a 5% Sales Commission of $10.00.
The breakeven is $0.91 more than $175.76 or the difference between $10.00 and $9.09.
Breakeven at 10% Net Profit = $177.78 with a 5% Sales Commission of $11.11.
The breakeven price is $2.02 more than $175.76 or the difference between $11.11 and $9.09.
Breakeven at 15% Net Profit = $179.17 with a 5% Sales Commission of $12.50.
The breakeven price is $3.41 more than $175.76 or the difference between $12.50 and $9.09.