Contribution margin calculator
See what one order really leaves after product cost, shipping, payment fees and the ad cost to get it, and how much ad cost an order can carry.
Example numbers. Replace them with yours.
- Contribution per order
- USD 14.26
- Contribution ratio
- 23.8%
- Monthly contribution
- USD 7,130
- Max ad cost per order
- USD 29.26
- Break-even ROAS
- 2.05×
What it calculates
Contribution margin is what an order adds to the business after every cost that comes with that order. Gross margin stops at product cost. Contribution margin also takes out shipping, payment fees and ad cost, so it is the number that tells you whether selling one more order helps or hurts.
How to read the result
A negative contribution means every order loses money, even before fixed costs. Max ad cost per order is your ceiling for cost per purchase in Meta or TikTok. Multiply contribution by monthly orders and compare with fixed costs to see if the month makes money.
Learn the metric:Contribution marginBreak-even ROAS
The formula
Contribution = Price − COGS − shipping − Price × fee % − ad cost Contribution ratio = Contribution ÷ Price Max ad cost per order = Price − COGS − shipping − fees Break-even ROAS = Price ÷ max ad cost per order
Worked example
Example inputs
- Selling price
- USD 60
- Product cost
- USD 22
- Shipping
- USD 7
- Payment fee
- 2.9%
- Ad cost per order
- USD 15
- Orders per month
- 500
Results
- Contribution per order
- USD 14.26
- Contribution ratio
- 23.8%
- Monthly contribution
- USD 7,130
- Max ad cost per order
- USD 29.26
- Break-even ROAS
- 2.05×
What changes the result
Ad cost per order at five values. Every other input stays as in the worked example; the highlighted row is the example.
| Ad cost per order | Contribution per order | Monthly contribution |
|---|---|---|
| USD 7.50 | USD 21.76 | USD 10,880 |
| USD 11.25 | USD 18.01 | USD 9,005 |
| USD 15 | USD 14.26 | USD 7,130 |
| USD 18.75 | USD 10.51 | USD 5,255 |
| USD 22.50 | USD 6.76 | USD 3,380 |
Use your real numbers
Analify reads order value and product cost from Shopify, shipping from connected couriers and ad spend from your ad accounts, and calculates Blended Profit and break-even ROAS every day.
Analify already reads 5 of these 6 inputs live, from Shopify · Courier · Ad accounts
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Questions
What is contribution margin in ecommerce?
The money an order leaves after product cost, shipping, payment fees and the ad cost to acquire it. It is what is left to pay fixed costs and make profit.
How is contribution margin different from gross margin?
Gross margin only subtracts product cost. Contribution margin also subtracts shipping, fees and ads, so it is lower and closer to what you keep.
What is a good contribution margin?
One that covers your fixed costs at the order volume you can realistically reach. Use the break-even calculator to check that.
Do you store what I enter?
No. The calculation runs in your browser and nothing is sent to Analify.
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