What is Break-even Point in Retail? Explained

The break-even point is the level of sales at which a business covers all its costs and neither makes a profit nor incurs a loss. It represents the point where total revenue equals total expenses. Knowing the break-even point is crucial for retailers as it helps determine the minimum sales needed to cover fixed and variable costs. Beyond the break-even point, additional sales contribute to profit. Retailers use break-even analysis to set pricing strategies, assess business viability, and make informed decisions regarding expenses and sales targets.