Contribution margin calculator.
The three levels answer three different questions: does the product make money, does the order make money, and does the growth make money.
Contribution 1
58.0 % margin
€58,000
After cost of goods
Contribution 2
46.2 % margin
€46,200
After variable order costs
Contribution 3
26.2 % margin
€26,200
After marketing
Contribution 3 is the number that decides whether growth is worth having. It is what is left to cover salaries, rent and profit.
Contribution before and after advertising. Fixed costs and tax are excluded.
From insight to action
What does the result mean for you?
Website, channels and profit measurement
The Løgbutikken engagement covered the website, email, Meta, Google Ads and ProfitMetrics. The business grew and was subsequently acquired.
Read the caseMeasurement and customer economics
Discuss measurement and bidding
We review the values you measure and how they can inform budget decisions.
Choose a time30 minutes · No obligation
01The three levels
Contribution 1 is revenue minus cost of goods. It is the product's contribution, and the number that purchasing and pricing should be steered by.
Contribution 2 subtracts the costs that follow each order: shipping, packaging, payment fees and picking. It is the order's contribution, and where free shipping and small baskets reveal their price.
Contribution 3 subtracts marketing. It is what remains for salaries, rent and profit — and the only one of the three that tells you whether the growth is worth having.
02Why CM3 is the number to steer by
A shop can grow revenue, hold its product margin and still earn less than last year because acquisition got more expensive. That only shows up at the third level.
Track it monthly alongside revenue. When the two curves diverge, there is a conversation to be had about what growth costs.
03Run it per category
A single number for the whole shop hides that some categories finance others. It is common for a third of the range to carry the entire profit while another third loses money after ads.
Run the calculation for each main category. The result usually changes both bidding and feed.
Questions
What is the difference between contribution and margin?
Contribution is the amount in currency. Margin is the same number as a percentage of revenue. The amount says how much is left; the percentage makes it comparable across products.
Should VAT be included?
No. Use revenue excluding VAT — it is not your money, and it distorts all three levels.
Read on
What is contribution margin?
Contribution margin is revenue minus variable costs — what's left to cover fixed costs and profit. The base number behind all profit-based steering.
What is gross margin?
Gross margin is the share of revenue left after cost of goods. The foundation under contribution margin, break-even ROAS and POAS.