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CM1 (Gross Margin) measures your profit after deducting all product costs (COGS) from net revenue—the foundation for understanding true product profitability.

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Formula

CM1 (Gross Margin) = Net Revenue − COGS − Other COGS

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Formula Components

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Example

Your Shopify store generated $125,000 in net revenue last month with $45,000 in COGS and $5,000 in other COGS entries.

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How It Works

CM1 represents your gross margin—what remains after paying for the products themselves. It’s calculated using COGS pulled automatically from your Shopify product data, plus any additional COGS you’ve configured in Cost Settings. This is the first level of profitability and the foundation for calculating higher contribution margin levels.

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When to Use

See all Contribution Margin metrics →