# Contribution margin calculator

> Free contribution margin calculator. See what each order leaves after product cost, shipping, payment fees and ad cost, and the most you can pay for ads.

Free, no sign-up, runs in the browser: https://analify-ai.scalyax.ai/tools/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.

## 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.

## 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

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 as in 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 (example) | USD 14.26 | USD 7,130 |
| USD 18.75 | USD 10.51 | USD 5,255 |
| USD 22.50 | USD 6.76 | USD 3,380 |

## 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.

## 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.

## 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 reads 5 of these 6 inputs live. Try the calculator: https://analify-ai.scalyax.ai/tools/contribution-margin-calculator

More free ecommerce calculators: https://analify-ai.scalyax.ai/tools