Free tool
Ecommerce Contribution Margin Calculator
Find what an order leaves after the costs of making the sale.
This ecommerce contribution margin calculator brings the variable cost stack into one view. Start with realized revenue, then include product cost, fulfillment, payment fees and the other variable costs attached to the sale. The result shows both the contribution amount and its share of revenue.
Contribution helps explain why two orders with the same gross margin can leave very different amounts for the business. Check which costs are included before comparing products, channels or periods. The Gross Margin Calculator isolates product cost; this page goes further into order economics. The Product Profit & Pricing Calculator connects the cost picture with the price decision.
Matched order economics · Explicit cost scope · Before fixed overhead
Per-order economics
Use a consistent scope and cost basis for every figure.
The example is illustrative. Replace it with your own figures; results update as you type. Your entries stay in this page until you choose to copy them.
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Copy an input checklist for Sidekick. Store reports may not contain every cost or scenario assumption; verify the source and mark missing figures rather than guessing.
Included variable costs
Acquisition
How this tool works
How contribution margin is calculated
On one per-order basis, pre-ad contribution is net revenue less product cost, fulfillment, payment fees, net shipping cost, packaging and additional return costs. Post-ad contribution also subtracts the acquisition allocation. Dividing either contribution amount by the same net revenue gives its margin ratio.
Enter revenue after discounts and refunds on the stated basis. Do not subtract those refunds again as a return cost. A separate return burden should cover only additional costs that remain outside the revenue and product-cost entries. Include acquisition spend once, and use the same order or period basis throughout.
Contribution = realized revenue − included variable costs. Contribution margin = contribution ÷ realized revenue × 100.
Following a $100 order through the cost stack
A $100 order with $40 product cost, $8 fulfillment, $3 payment fees and $4 additional variable costs leaves $45 before advertising. Allocating $20 of acquisition cost leaves $25 of post-ad contribution, or 25% of revenue, before fixed overhead.
Your full calculation
| Measure | Result · USD |
|---|---|
| Net revenue per order | $100.0 |
| Product cost | $35.0 |
| Other included variable costs | $17.0 |
| Gross profit per order | $65.0 |
| Contribution before acquisition | $48.0 |
| Acquisition cost allocation | $12.0 |
| Contribution after acquisition | $36.0 |
| Contribution margin after acquisition | 36% |
| Contribution margin before acquisition | 48% |
| Fulfillment cost | $6.0 |
| Payment fees | $3.0 |
| Net shipping cost | $4.0 |
| Packaging cost | $2.0 |
| Additional return cost | $2.0 |
Questions & answers
Understanding your result
Is contribution margin the same thing as profit?
Contribution is the amount left after the variable costs included in the calculation. Net profit also reflects the remaining expenses, including fixed overhead, tax and financing. A positive contribution can help cover those expenses without proving the business is profitable.
What is a good contribution margin ratio?
A useful ratio depends on the costs included, product mix, channel and fixed costs the business must cover. Compare the same definition across like orders or periods. A general percentage cannot establish whether your cost structure works.
What does a 40% contribution margin mean?
It means 40 cents of each revenue dollar remain after the variable costs included. On $100 of revenue that is $40. If advertising is excluded, it still needs to be covered along with fixed overhead.
How should I include refunds and return costs?
Reduce revenue by the refunds already recognized. Match product cost to the inventory-cost treatment you are using, including any recovery already recorded. Add only extra return handling, write-offs or other burdens not included elsewhere, so the same loss is not deducted twice.