Contribution margin calculator
The contribution margin is the net revenue that remains after deducting the chosen variable costs to cover fixed costs and profit. Calculate per-unit value, margin percentage, total value and break-even with a visibly defined cost basis.
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Calculate contribution margin online
Enter your net values and keep the chosen cost level constant across all comparisons. The example values show what the result looks like.
Without VAT and after directly assigned refunds.
optional. Quantity for the period under review.
Purchase or production including packaging.
optional. Pick-and-pack, postage and other volume-dependent logistics costs.
optional. The actually attributable average per unit sold.
optional. Variable returns and refund costs spread across total sales.
optional. Only include it if you explicitly want to measure this level after marketing.
optional. Only for the optional break-even quantity; not part of the per-unit contribution margin.
Enter the values on the left.
The result appears here, with the working. Nothing is stored.
Definition first
The contribution margin formula
The German federal start-up portal (Existenzgründungsportal) describes the contribution margin as revenue minus variable costs. For reliable comparisons you also have to disclose which variable costs your level contains.
Per unit Margin Contribution margin ÷ net revenue × 100
Break-even quantity Fixed costs ÷ positive per-unit contribution margin
E-commerce cost basis
Which costs belong in the contribution margin?
There are several valid contribution margin levels. The mistake rarely comes from the formula but from changing definitions, flat-rate costs or different periods.
| Cost block | Typical content | Check question |
|---|---|---|
| Cost of goods | Purchase, production and directly attributable product packaging | Costs per SKU and period up to date? |
| Shipping & fulfilment | Postage, pick-and-pack and volume-dependent warehouse services | Actual rates used instead of a flat rate? |
| Payment & platform | Transaction and sales-dependent marketplace fees | Refunded or tiered fees taken into account? |
| Returns | Variable handling, return shipping and goods that cannot be resold | Spread consistently across sales or orders? |
| Marketing | Only attributable variable advertising costs for the chosen level | Attribution and period documented? |
Example per order
CM1, CM2 and CM3 on one order
This staging is common in e-commerce: CM1 after cost of goods, CM2 after order-related costs, CM3 after attributable advertising costs. In classic multi-level contribution costing, fixed-cost blocks are instead deducted step by step after the first level; what matters is that you define your levels once and stick to them.
| Item | Amount | Share of net revenue |
|---|---|---|
| Net revenue (€119.00 gross ÷ 1.19) | €100.00 | |
| − Cost of goods (COGS) | -€35.00 | |
| = CM1 | €65.00 | 65% |
| − Shipping and packaging | -€6.50 | |
| − Payment fees | -€2.20 | |
| − Returns share | -€4.00 | |
| = CM2 | €52.30 | 52.3% |
| − Attributable advertising costs | -€22.00 | |
| = CM3 | €30.30 | 30.3% |
An illustrative example without customer data. For the margin per unit before these costs use the margin calculator.
Reading the result correctly
Four checks before every decision
- Net revenue, quantity and costs must cover the same period and the same unit.
- A positive contribution margin does not automatically cover all fixed costs.
- A negative value calls for a check of data and allocation first.
- Only compare products, months and channels at an identical cost level.
FAQ
Frequently asked questions about contribution margin
How do you calculate the contribution margin?
Contribution margin = net revenue minus variable costs. Per unit you subtract from net revenue all costs caused by this unit or this order. Multiplied by the quantity sold this gives the total contribution margin.
What counts as variable costs?
Depending on the chosen cost level they include cost of goods, packaging, shipping and fulfilment, payment and platform fees, variable returns costs and attributable advertising costs. Document exactly what you include.
What does a negative contribution margin mean?
Then net revenue does not even cover the variable costs included in your calculation. More sales would increase the loss on this cost basis. Check price, costs, returns and allocation before you decide.
What are CM1, CM2 and CM3 in e-commerce?
A common staging per order: CM1 is net revenue minus cost of goods, CM2 also deducts order-related costs such as shipping, packaging, payment fees and returns, CM3 also the attributable advertising costs. Define the levels once and only compare identically defined values.
How is the break-even quantity calculated?
Break-even quantity = fixed costs divided by the positive contribution margin per unit. If the per-unit contribution margin is zero or negative, there is no positive break-even with the values entered.
Do not pull every value together by hand
NorthProfit can bring profit and cost values together from data sources that are actually connected. Completeness and result depend on the available sources and maintained costs; NorthProfit does not replace accounting or tax advice.