How To Track Contribution Margin On A Daily Basis For Your Ecommerce Business

Common Thread Collective

by Common Thread Collective

Jan. 31 2023

Contribution margin is net revenue minus all the variable costs in a business, including fulfillment, cost of goods, advertising, and payment processing fees.

It’s also the primary driving mechanism for the businesses we work for, replacing downstream metrics like MER and ROAS. Why?

Because, by taking into account all variable costs associated with selling a product, contribution margin becomes the best possible measure of how profitable your advertising efforts are. 

By setting daily expectations for contribution margin, you’ll be in a better position to grow your business sustainably.

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Common Thread Collective

Common Thread Collective is the leading source of strategy and insight serving DTC ecommerce businesses. From agency services to educational resources for eccomerce leaders and marketers, CTC is committed to helping you do your job better.

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