Contribution Margin
Written by Christopher Krassnig - Founder - Kairos Exchange and ZenoX Media.
Published
- Checks in every memo8
- Automatic on day one3 of 8
- Read by handad spend and processor payouts
- Tracked ecom salesEUR 200M+ZenoX ad-management figures, not Kairos deal volume - Kairos hasn't closed a deal yet.
Contribution Margin is revenue minus the variable cost of one sale: product cost, shipping, payment fees, and any ad spend that scales per order. It comes before a fixed cost like software or salaries is paid. A sale where variable costs run sixty cents on the dollar contributes forty cents toward fixed costs and, after that, profit.
Not to Be Confused With
- Gross Margin
- Gross margin stops at cost of goods sold; contribution margin also removes other variable costs, ad spend included.