Contribution margin per order: how to calculate it in an online shop

The contribution margin (German: Deckungsbeitrag) is what one order leaves after all costs that arise because of that order: revenue minus product, shipping, fees, advertising and returns. For the example product it is €4.95 per order. Fixed costs such as software or rent are paid from the sum of these contributions – only what is left after them is profit.

Enter your own price and costs – the calculator shows the contribution per order and the margin.

Open the profit calculator

The formula

Start with the net revenue of an order (price without VAT, after expected returns). Subtract every cost that only exists because the order exists. What remains is the contribution of that order. Divided by the net revenue it is the contribution margin in percent.

Contribution per order	net revenue − (product + shipping + marketplace and payment fees + advertising + returns + other)
Contribution margin (%)	contribution ÷ net revenue
Contribution per month	contribution per order × orders per month
Profit per month	contribution per month − fixed costs

Contribution, margin and profit are different things

The contribution is an amount per order. The margin is the same figure as a share of revenue, so you can compare products of different prices. Profit comes last: it is what remains of all contributions after your fixed costs.

Accounting often splits the contribution into several levels. Here it simply means one order after its own variable costs – the same figure the profit calculator shows as “contribution per order”. For tax or bookkeeping questions ask your advisor.

Which costs belong in it

Count a cost if it disappears when you sell one order less.

Product or production cost of the item
Shipping you pay for the order and packaging
Marketplace and payment fees, which grow with the price
Advertising per order (ad spend ÷ orders it brought)
Expected returns: the share of orders that come back, times what a return costs
Not included: rent, software subscriptions, salaries, your own income – these are fixed costs

Table: contribution by order volume

Same product (€39.99 incl. 19 % VAT, purchase price €12.00, shipping €4.50, €3.00 ads, 10 % returns). The fixed costs of €1,000.00 per month are an assumption for the example:

Orders per month	Contribution	After €1,000.00 fixed costs
50	€247.30	-€752.70
100	€494.60	-€505.40
150	€741.91	-€258.09
200	€989.21	-€10.79

Worked examples: One order of a €39.99 product

15 % marketplace fee, purchase price €12.00, shipping €4.50, €3.00 advertising, 10 % returns at €5.00, 19 % VAT. Example numbers, not data from a real shop.

Net revenue per order (after returns): €30.24
Product cost: €10.80
Fees, shipping, ads and returns: €14.50
Contribution per order: €4.95
Contribution margin: 16%
Orders per month to cover €1,000.00 fixed costs: 203

A product only pays for your fixed costs through the contributions of many orders – so check the contribution per order first, then multiply.

Common mistakes and how to fix them

Calling the contribution “profit”

Why it matters: Fixed costs are not yet deducted, so a positive contribution can still mean a loss for the month.

Fix: Multiply by your orders and subtract the fixed costs before you call it profit.

Leaving out advertising or returns

Why it matters: Both arise per order. Without them the contribution looks higher than it is.

Fix: Spread ad spend over the orders it brought and include the expected return rate.

Using the gross price as revenue

Why it matters: If you charge VAT, it is not your money. Revenue is the price without VAT.

Fix: Work with the net price, as the calculator does.

Frequently asked questions

What is the contribution margin in simple terms?

The money one order leaves after the costs it causes itself. It is what is available to pay your fixed costs and, after that, to become profit.

Is the contribution margin the same as the profit margin?

Not exactly. The contribution is an amount per order; the margin is that amount as a share of revenue. Profit is what remains after the fixed costs.

What if the contribution is negative?

Then every order loses money before fixed costs, and selling more makes it worse. Raise the price, lower the costs or stop selling the product – the break-even price shows the lowest price that works.

How do I calculate it for many products?

Upload your product list as a CSV to the catalogue analysis: it calculates the contribution for every row with the same formulas.