Working out if you are actually profitable

You did about $2,600 last month. You know roughly what your materials cost. And there is still nothing in the account, and a good month feels exactly like a bad one.

Because profit is three numbers in a specific order, and almost everyone only calculates the first. What one unit costs to make. What one order costs to fulfil, which is a different and larger number. And what's left at the end of the month after the costs that arrive whether you sell anything or not.

A candle that costs $7.24 in materials and sells for $24 is not a 70% margin product. By the time it's in a box, through the postal system and past a card processor, it's closer to 57%, and that's before the $49 subscription, the market stall, the insurance and the eleven hours you spent pouring. The rest of this is one seller's actual month, line by line, so you can do yours.

The three numbers, in the order they matter

Unit cost. Everything physically in the product. Not your time, not the packaging it ships in. Just the thing.

Contribution per order. What one order leaves you after unit cost, the box it goes in, the gap between what postage cost and what you charged, and the payment fees on that specific transaction. This is the number that tells you whether a product is worth selling at all.

Operating profit. Total contribution for the month, minus the fixed stack. Subscriptions, stalls, insurance, the design tool you forgot about. Fixed costs don't scale down when you have a quiet month, which is why they're the ones that hurt.

And then a fourth number that isn't accounting but is the only one that answers "is this worth it": what you earned per hour.

Rosa, candles, San Antonio

Rosa pours soy candles in her garage in San Antonio and sells three things. An 8oz single at $24, a three-candle gift set at $60 with free shipping, and a four-pack of glass tea lights at $12. She ships most orders and does two Saturday markets a month.

August looked like this: 62 singles (48 shipped, 14 at a market), 14 gift sets, 24 tea light packs. $2,616 of goods, plus $356.40 collected in shipping. One hundred orders.

What one unit costs

Component	8oz single	4-pack tea lights
Soy wax	$2.80	$2.15
Fragrance oil	$1.10	$0.72
Wick and sticker	$0.18	$0.44
Vessel	$2.35	$1.90
Lid	$0.55	none
Labels, including the warning label	$0.26	$0.39
Unit cost	$7.24	$5.60

Two notes. The warning label is 4 cents and it's a legal requirement she'd forgotten to cost. And these are per-unit costs at her actual purchase quantities, which is not the same as the price on the supplier's bulk page. Cost what you buy, not what you could buy.

What one order costs

Here's where it stops being obvious. This is the table that matters.

	Single, shipped	Single, at market	Tea lights, shipped	Gift set, free shipping
Price to buyer	$24 + $4.95 ship	$24	$12 + $4.95 ship	$60
Unit cost	$7.24	$7.24	$5.60	$21.72
Packaging	$1.30	none	$1.30	$6.09
Postage paid, less postage charged	$0.47	none	$3.15	$11.80
Payment fees	$1.26	$0.65	$0.85	$2.34
Left on the goods	$13.73	$16.11	$1.10	$18.05
As a share of the price	57%	67%	9%	30%

The processor figures above assume 2.9% plus 30 cents on a card, which is a common shape and not a promise. Take your own rate off your own processor's pricing page for your own country, because the fixed piece per transaction differs and it's the piece that does the damage on small baskets. The 1–3% on the goods that Sailo charges on card sales is in there too: 24 to 72 cents on the single, 60 cents to $1.80 on the gift set depending on the plan, and nothing at all on the market sales, because those never went through a card rail Sailo touched.

Now read the last row.

The tea lights, which Rosa had been promoting as an entry product to get people in, leave her $1.10 and take six minutes to pack. She is working for about eleven dollars an hour on that SKU, before any of her fixed costs. The reason is entirely the postage: glass tea lights in a four-pack weigh more than a single candle, they crossed a weight band, and she was charging the same flat $4.95 she'd set eighteen months earlier.

Weigh a packed box on a kitchen scale before you set a shipping price. The difference between 15 ounces and a pound is a whole price band, and nobody sends you a message when you cross it.

The gift set is the other surprise. It's her highest-value order, it's the one she pushes hardest in December, and it returns 30% against the single's 57%, because free shipping on the heaviest thing she sells costs her $11.80 every time. Whether free delivery earns its place is a real decision rather than an obvious one, and should you offer free delivery works through when it does.

The month

	August
Goods sold	$2,616.00
Shipping collected from buyers	$356.40
Money in	$2,972.40
Materials	−$887.36
Packaging	−$178.86
Postage paid out	−$619.76
Payment fees, all rails	−$122.81
Market stall, 2 Saturdays at $45	−$90.00
Liability insurance	−$22.00
Sailo Business	−$49
Domain, email, design tool	−$20.00
Operating profit	$1,011.62

$1,011.62 on $2,616 of goods. Call it 39%, against the 70% she believed she was running at. Nothing went wrong in August. That's a normal month, correctly counted.

And then her hours

This is the section people skip, and it's the one that changes decisions.

What	Time
Pouring, 104 candles and 24 tea light packs, in batches	14h 30m
Labelling and curing checks	2h 00m
Packing 86 shipped orders	7h 30m
Post office runs, 5 of them	2h 55m
Customer messages	4h 00m
Photography and posting	5h 00m
Two markets, including setup, drive and pack down	14h 00m
Ordering, bookkeeping, restocking	3h 00m
Total	52h 55m

$1,011.62 divided by 53 hours is $19.09 an hour, for skilled work, on weekends, with the risk on her.

That's not a disaster and it isn't a triumph. It's a fact, and it's the first time she'd ever had it. What it told her wasn't "quit". It told her that the markets consume 14 hours to produce 14 sales, and that a Saturday spent making 30 more candles for the shop would have been worth more.

Break-even, in orders

Rosa's fixed stack is $151.99 a month. Her average contribution across the whole August mix works out at about $11.64 an order.

$151.99 divided by $11.64 is 13.1. She needs 14 orders a month before she has earned a single dollar.

Do this calculation for yourself, because it reframes a quiet month. Thirteen orders isn't "a slow month", it's the month where you worked for free. And it's the number that tells you whether a subscription is worth adding: any fixed cost you take on converts directly into orders you must sell before you're back where you started.

The costs people forget, and why each one hides

Packaging. It hides because it's bought in bulk, months apart, in a single charge that doesn't feel connected to any particular order. Divide the invoice by the number of units it contains and put the result in the per-order table.

The postage gap. It hides because you set the shipping price once and postal rates move. Re-weigh and re-price every product twice a year. Rosa's gap was 47 cents on a single and $3.15 on tea lights, and she'd have sworn she was breaking even on both.

The fixed fee per transaction. In August, the percentage side of Rosa's card fees came to about $76. The 30-cents-per-transaction side came to about $26 across 86 online orders, and Sailo's 1–3% came to somewhere between $22.80 and $68.40 depending on her plan. At small basket sizes the flat fee is the part that hurts and the percentage is the part everyone argues about. How payment fees eat a small order has the full shape of that.

Subscriptions. They hide because they're small and monthly. Rosa's came to $40 a month across three tools, which is three and a half orders.

Samples and giveaways. The candle you send to someone with an audience costs $7.24 plus $5.42 postage, every time. That's fine as marketing. It's not fine as an untracked hole.

Your own time. It hides because it never leaves a bank account. Price it at whatever you'd be paid for an hour of anything else, and put the number in.

Returns, breakages and the reship. One glass jar arriving cracked costs a full unit, a full postage, and twenty minutes. Over a year, at even 2%, it's a real line.

What to change first, ranked by what it pays

Ordered by how much money each move produces per hour of effort, using Rosa's numbers.

1. Raise the price of the thing that already works. $24 to $26 on the single is $124 a month, straight through to profit, with no change to anything else. This is nearly always the strongest single move available and it's the one people reach for last. How to price what you make is worth reading before you do it, because a two-dollar rise defended badly costs you more than it earns.
2. Fix or kill the loss-maker. The tea lights either go to $18, or become pickup-and-market only, or exist purely as an add-on to another order where the box is already going. At $1.10 a pack they're currently a hobby inside a business.
3. Charge for shipping on the heavy thing. Eight dollars towards an $11.80 send on a $60 gift set recovers about $112 a month, and almost nobody abandons a sixty-dollar order over an eight-dollar shipping line.
4. Batch bigger. Pouring 48 at a time instead of 24 saves setup and cleanup, which is most of the time cost. Worth roughly an hour a month, which is worth about $19.
5. Fees, last. Everyone starts here and it's the smallest number on the page. Her entire payment cost for the month was $122.81, and she cannot get it to zero.

That order is not a coincidence. Price and product mix are worth several times what fee optimisation is worth, at every volume a small seller operates at.

What Sailo can and can't tell you

Sailo shows you what came in. It has no idea what went out. It doesn't know your wax costs $2.80 a pour or that you spent $62 on tubes, and it cannot tell you that your tea lights lose money, because from its side a tea light sale and a gift set sale look equally like revenue.

The analytics window is worth planning around too: 7 days on free, a year on Pro at $19 a month, three years on Business at $49. If you want to compare this August with last August, either be on a plan that keeps it or export your orders on a schedule and keep the file yourself. CSV export starts on Pro, which means on the free plan the comparison you'll want in a year is a copy-and-paste job you almost certainly won't do.

And the subscription itself is a fixed cost that belongs in your table like any other. At Rosa's 100 orders a month, $49 is 20 cents an order and barely worth discussing. At 12 orders a month it's $1.67 an order, which is more than the payment fees, and at that volume the honest advice is not to be on it.

Do this before the end of the week

Take one product. The one you sell most of. Open a spreadsheet and list every component with its actual cost at the quantity you actually buy, then add the box, the filler, the tape, the card, and the difference between what postage cost last time and what you charged.

Weigh a packed one. Check the postal price for that weight today.

Then take last month's bank statement and add up every fixed thing that left regardless of sales. Divide that by the contribution you just calculated, and you'll have your break-even in orders.

Two hours of work, once. If the numbers aren't there to do it with, start with keeping records when you hate paperwork, because a costing built on remembered figures is a story rather than an answer.

And if this exercise makes you realise the whole thing has quietly become something bigger than a hobby, do you need to register your business is the next question in the queue.