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Contribution margin metrics track profitability at multiple levels—from gross margin (CM1) through operating profit (CM4). These build progressively as costs are deducted.
Data Source: Shopify
Metrics: 24

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Contribution Margin Levels

LevelNameFormula
CM1Gross MarginRevenue - COGS
CM2After FulfillmentCM1 - Fulfillment Costs - Transaction Costs
CM3Contribution MarginCM2 - Marketing Cost - Agency Fees
CM4Operating ProfitCM3 - Opex

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Metrics in This Group

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CM Per Order

MetricDescriptionWhen to Use
CM1 Per OrderGross margin per orderBenchmark product profitability
CM2 Per OrderPost-fulfillment margin per orderInclude variable costs
CM3 Per OrderContribution margin per orderInclude marketing costs
CM4 Per OrderOperating profit per orderFull cost allocation

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New Customer CM Per Order

MetricDescriptionWhen to Use
New Customer CM1 Per OrderNC gross margin per orderNew customer profitability
New Customer CM2 Per OrderNC post-fulfillment marginInclude new customer variable costs
New Customer CM3 Per OrderNC contribution marginAcquisition profitability
New Customer CM4 Per OrderNC operating profitFull new customer economics

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Cost Components

MetricDescriptionWhen to Use
Total CostAll costs combined (COGS + fulfillment + transaction + marketing + fees + opex)Measure complete cost structure
New Customer Total CostAll costs for first-time buyer ordersMeasure acquisition cost structure
Marketing CostUser-defined marketing costsTrack marketing spend allocation
Marketing Cost Per OrderAverage marketing cost per orderMeasure per-order marketing efficiency
Agency FeesUser-defined agency feesTrack agency spend allocation
OpexOperating expensesTrack overhead allocation

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How These Metrics Relate

Contribution margins build progressively:
  1. CM1 (Gross Margin) = Revenue - COGS
  2. CM2 (After Fulfillment) = CM1 - Fulfillment - Transaction Costs
  3. CM3 (Contribution Margin) = CM2 - Marketing - Agency Fees
  4. CM4 (Operating Profit) = CM3 - Opex
Each level shows profitability after deducting the next set of costs.

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Choosing the Right Metric

  • Product profitability: Use CM1 to evaluate products before variable costs
  • Order economics: Use CM2 to see profit after all variable costs
  • Marketing efficiency: Use CM3 to measure contribution after marketing
  • Business profitability: Use CM4 for bottom-line order profitability
  • Customer acquisition: Compare New Customer CM metrics to justify CAC