> ## Documentation Index
> Fetch the complete documentation index at: https://docs.upstackdata.com/llms.txt
> Use this file to discover all available pages before exploring further.

# Cohort CM2: Contribution Margin After Fulfillment by Cohort

> Track cumulative CM2 (after fulfillment costs) per customer by cohort. Measure Shopify profitability before marketing spend.

<Tip>
  Cumulative contribution margin after fulfillment and transaction costs per customer, showing profit before marketing spend.
</Tip>

## Formula

<Info>
  **Cohort CM2** = **Cumulative CM2** ÷ [**Cohort Customers**](/reference/metrics/orders/ltv/cohort-customers)
</Info>

### Formula Components

| Metric                                                                 | Definition                                                    |
| ---------------------------------------------------------------------- | ------------------------------------------------------------- |
| **Cumulative CM2**                                                     | Total CM2 (CM1 − Fulfillment − Transaction Costs) from cohort |
| [**Cohort Customers**](/reference/metrics/orders/ltv/cohort-customers) | Number of customers in the acquisition cohort                 |

| Metadata        |                                                                                      |
| --------------- | ------------------------------------------------------------------------------------ |
| **Type**        | Currency                                                                             |
| **Data Source** | [Shopify](/sources/catalog/shopify), [Upstack Costs](/sources/catalog/upstack-costs) |
| **Aggregation** | Average                                                                              |

***

## Example

Cumulative CM2 per customer for a January 2024 cohort:

| Period   | Cumulative CM2/Customer | vs CM1     |
| -------- | ----------------------- | ---------- |
| Month 1  | \$18                    | 64% of CM1 |
| Month 3  | \$32                    | 67% of CM1 |
| Month 6  | \$50                    | 69% of CM1 |
| Month 12 | \$76                    | 72% of CM1 |

***

## How It Works

Cohort CM2 extends CM1 by also subtracting fulfillment costs (shipping, handling) and transaction costs (payment processing). This represents the profit available to cover marketing and fixed costs. As cohorts mature and order more, fulfillment efficiency often improves. Costs are configured in your Upstack Cost Settings.

***

## When to Use

| Scenario                          | Action                                               |
| --------------------------------- | ---------------------------------------------------- |
| Determining marketing budget      | CM2 is the max you can spend on marketing profitably |
| Evaluating fulfillment efficiency | Compare CM2 to CM1 across cohorts                    |
| Calculating payback period        | How long until CM2 covers CAC                        |
| Comparing shipping strategies     | Free shipping cohorts may have lower CM2             |

***

## Related Metrics

| Metric                                                                                   | Relationship                              |
| ---------------------------------------------------------------------------------------- | ----------------------------------------- |
| [Cohort CM1](/reference/metrics/orders/ltv/cohort-cm1)                                   | CM1 before fulfillment costs are deducted |
| [Total Fulfillment Cost](/reference/metrics/orders/fulfillment/total-fulfillment-cost)   | Costs subtracted from CM1 to get CM2      |
| [CAC](/reference/metrics/orders/performance/cac)                                         | Compare to CM2 for payback analysis       |
| [Contribution Margin](/reference/metrics/orders/contribution-margin/contribution-margin) | Non-cohort contribution margin            |

[See all LTV metrics →](/reference/metrics/orders/ltv)