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NC CM1 % is the share of first-order net revenue left after product cost. It is the cleanest way to see what your welcome offer and starter products do to margin.

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Formula

NC CM1 % = ( NC CM1 ÷ NC Net Revenue ) × 100

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Formula Components

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How It Works

Only new customer orders go into either side of the ratio. An order is a new customer order when it is the earliest non-cancelled order Upstack has for that Shopify customer ID; there is exactly one per customer. Orders without a customer attached are excluded. Upstack sums NC CM1 and NC net revenue over the whole range and divides once. Days with more first orders weigh more. Discounts reduce the denominator but not product cost. That makes NC CM1 % very sensitive to welcome offers: a percentage discount shrinks revenue while COGS stays put.

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Example

One month, split by customer type: Product cost is 33% of gross revenue for both groups, so the 6.6-point gap comes almost entirely from discounts and refunds.

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How to Interpret It

Use NC CM1 % to price your welcome offer. A discount removes revenue but leaves product cost where it was, so every discounted dollar comes straight out of gross margin dollars. In the example, the 20% code took NC CM1 % from 66.0% to 57.1%.
  • NC CM1 % well below RC CM1 % with similar product cost rates means acquisition discounts are doing the damage.
  • Both low points to product costs or pricing rather than promotions; check CM1 % for the store-wide trend.
  • A sudden drop often lines up with a sitewide sale, when first-time buyers stack sale prices with welcome codes.

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Common Pitfalls

  • Missing costs. Items without product cost or a Default COGS % in Cost settings push NC CM1 % up. New products are the usual culprit, and they’re often what first-time buyers try.
  • Small samples. On a daily view with few first orders, one refund can move the rate several points. Use a week or longer.

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FAQ

One that leaves enough, after shipping and payment fees, to recover a meaningful share of CAC. Work it out from NC CM2 % and your acquisition cost rather than an industry figure.
Usually discounts. First orders get the deepest offers. A difference in product mix (starter kits, sample sizes) is the next thing to check.
See all Contribution Margin metrics →