Fixed vs Variable Cost Calculator
Operating leverage cuts both ways.
Operating leverage
4.65
-20% revenue moves profit -93.1%
Operating leverage of 4.65 means every percent of revenue moves profit by 4.65 percent, in both directions. High fixed costs amplify good years and are what turn a modest downturn into a loss.
How the Fixed vs Variable Cost Calculator works
Operating leverage amplifies good years and turns a modest downturn into a loss. A business with high fixed costs grows profit faster than revenue and loses it faster too — knowing the multiplier tells you how much of a downturn you can absorb.
Not financial advice. Marketplace fees change, and they vary by country, plan and seller status. Every rate here is an editable default, not a quoted price — check the platform's current fee schedule before you price a product against it. This is not tax or business advice.
Frequently asked questions
What is operating leverage?
The ratio of the percentage change in profit to the percentage change in revenue. A leverage of 3 means a 10% revenue fall cuts profit by 30%.
Is high operating leverage bad?
It is risk, not badness. High fixed costs and high margins produce excellent results at scale and severe ones below break-even. The question is how confident you are in the volume.
How do I reduce it?
Convert fixed costs to variable — outsourced fulfilment instead of a warehouse, contractors instead of staff, usage-based software. Each trades a lower ceiling for a lower floor.
What cost structure suits ecommerce?
Mostly variable in the early years, shifting to fixed as volume justifies owning capability. Committing to fixed costs before the volume is proven is the common and expensive mistake.