What is Contribution margin?

Definition: Contribution margin is the amount per sale that remains after all variable costs and is meant to cover fixed costs.

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Example

Price €50, cost of goods €18, shipping and fees €7: contribution margin €25.

How to use it

With the “Margin and Profit Calculator” calculator you enter your own numbers and see the result instantly. It runs in your browser, without sign-up. In the guide “How to calculate break-even in an online store” you find the background and common mistakes.

Related terms

  • Break-even ROAS: Break-even ROAS is the ROAS from which your advertising no longer loses money.
  • Margin: Margin is the share of the net selling price that remains as profit.

Frequently asked questions

What is Contribution margin?

Contribution margin is the amount per sale that remains after all variable costs and is meant to cover fixed costs.

What is an example of Contribution margin?

Price €50, cost of goods €18, shipping and fees €7: contribution margin €25.

Work it out with your numbers

The matching calculator runs in your browser. No sign-up.

Margin and Profit Calculator

Keep reading

Margin and Profit CalculatorHow to calculate break-even in an online storeBreak-even ROASMarginAll terms