I became curious about my break-even point because I was recently accepted into Text Link Ads (TLA) program. 

With all the hype about TLA and Google from Problogger and John Chow, I realized I could generate an additional stream of income for my website in addition to Google Adsense and Amazon.

This calculator takes four factors into consideration when calculating the break-even point.  For the purpose of this article, I will define these factors as they apply here.

Variable Unit Cost. Since I am only calculating the break-even point for my hosting plan, there will be no variable costs here. 

Fixed Cost.   This cost is subjected to future rate increases, and will be adjusted accordingly.  In the meantime, because I purchased my hosting plan in advance, my monthly rate is fixed at $6.95 a month for 24 months.

$6.95 per month X 24 months = $166.80

Price Per Unit.TLA splits 50/50 from the final sale price of any ads sold.  According to my email from TLA, “Your price is set at $15.00 per ad. We have manually reviewed this inventory and feel we have priced this according to fair market value.”  This means I would receive $7.50 a month for each ad purchased.

Expected Unit Sale. This is where you can run different scenarios which I will list below.

1 Unit = 1 TLA

1 Unit X 24 months = 24 units 

2 Units X 24 months = 48 units

4 Units X 24 months = 96 units

This would be the best case scenario where each unit was sold out for 24 months.  If I want to see what my break-even point would be if only 80% of my possible units were sold out, then I can subtract the total number of units by 20%.

And now the results…

Each unit will be sold at $7.50 as explained earlier in my price per unit. 

• 1 Unit =  $180.00 total revenue giving me $13.20 profit

• 2 Units = $360.00 total revenue giving me $193.20 profit

• 4 Units = $720.00 total revenue giving me $553.20 profit

Regardless of how many units I sell, my break-even point is 22 units.