The math
Contribution margin = net selling price − variable costs. Variable costs are everything incurred per unit sold.
- Purchasing or manufacturing
- Shipping and packaging
- Payment and marketplace fees
- Return rate
- Ad cost per sale
In euros and in percent
The amount says how much each unit contributes to fixed costs. The percentage makes products with different prices comparable.
Why not ROAS
A good ROAS can burn money at a low margin. Contribution margin after ad costs shows whether a campaign really pays off.
In Peak Products
The calculation in Peak Products works this out per product and variant, compares scenarios, and shows which products tie up cash in inventory.
