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Finance

Fixed vs Variable Cost

Also known as fixed cost, variable cost, fixed costs, variable costs

Fixed costs stay the same no matter how much you sell, like rent. Variable costs rise with each sale, like packaging and delivery.

Example

Your ₹40,000 office rent is fixed; the ₹60 you spend shipping each order is variable.

Related terms

Unit Economics
The profit or loss from a single customer or sale. If each unit loses money, growing faster just loses money faster.
Gross Margin
The share of each sale left over after the direct cost of making it — before overheads. Higher margins give you more room to grow.
Break-even
The point where your revenue exactly covers your costs — no profit, no loss. After this, you start making money.

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