Finance · Calculator
Contribution Margin Calculator — Contribution Margin
Contribution margin is the share of each sale left after variable costs — COGS, packaging, shipping, and payment fees — before fixed costs and ads. It is gross margin with the delivery reality baked in.
The formula
Contribution Margin = ((Price − Variable Costs) ÷ Price) × 100Calculate it live
Live calculator — plug in your numbers
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Contribution Margin (%)
What it means for your business
Break-even ROAS and CAC math only work off contribution margin, not gross margin — a ₹1,000 order with 35% gross margin can be 18% contribution once shipping and fees land. Margin is the number that decides what advertising can pay.
Machine-readable markdown
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# Contribution Margin — Contribution Margin
**Category:** Finance
**Slug:** /glossary/contribution-margin/
## Definition (easy to understand)
Contribution margin is the share of each sale left after variable costs — COGS, packaging, shipping, and payment fees — before fixed costs and ads. It is gross margin with the delivery reality baked in.
## Formula
“`
Contribution Margin = ((Price − Variable Costs) ÷ Price) × 100
“`
## What it means for your business
Break-even ROAS and CAC math only work off contribution margin, not gross margin — a ₹1,000 order with 35% gross margin can be 18% contribution once shipping and fees land. Margin is the number that decides what advertising can pay.
## Source
Socialee eCommerce Glossary — https://ecommerce.socialee.in/glossary/