CM2 (After Fulfillment) measures your profit after deducting all variable costs—COGS, fulfillment, and transaction costs—from net revenue.
CM2 = CM1 − Shipping Cost − Handling Cost − Other Fulfillment − Gateway Cost − Other Transaction
| Metric | Definition |
|---|
| CM1 (Gross Margin) | Net revenue minus COGS |
| Shipping Cost | Cost to ship orders to customers |
| Handling Cost | Per-order handling and packaging costs |
| Other Fulfillment Cost | Additional fulfillment expenses |
| Gateway Cost | Payment processing fees |
| Other Transaction Cost | Additional transaction-related costs |
| Metadata | |
|---|
| Type | Currency |
| Data Source | Shopify, Upstack Costs |
| Aggregation | Sum |
Example
Your Shopify store has $75,000 CM1, with $8,000 in fulfillment costs and $4,500 in transaction costs.
| Component | Amount | Calculation |
|---|
| CM1 | $75,000 | Starting margin |
| Shipping Cost | $5,000 | Delivery costs |
| Handling Cost | $2,000 | Packaging labor |
| Other Fulfillment | $1,000 | Warehouse fees |
| Gateway Cost | $3,750 | 3% processing |
| Other Transaction | $750 | Currency conversion |
| CM2 | $62,500 | $75,000 − $12,500 |
How It Works
CM2 builds on CM1 by deducting all fulfillment costs (shipping, handling, other fulfillment) and transaction costs (payment gateway fees, other transaction costs). This gives you a clearer picture of profit after all variable per-order costs—before marketing spend.
When to Use
| Scenario | Action |
|---|
| Optimizing fulfillment costs | Compare CM2 across shipping methods to reduce variable costs |
| Evaluating payment processors | Measure gateway cost impact on CM2 |
| Setting break-even targets | Know your CM2 before planning marketing spend |
| Analyzing order profitability | Understand true margin per order before acquisition costs |
| Metric | Relationship |
|---|
| CM1 (Gross Margin) | Input margin before fulfillment deductions |
| CM2 % | CM2 as a percentage of net revenue |
| CM3 (Contribution Margin) | CM2 minus marketing costs |
| Total Fulfillment Cost | Combined fulfillment costs |
