Short answer
Contribution margin is what remains from an order after product cost, shipping, payment fees, discounts, expected RTO/returns and ads. It is the scoreboard for a D2C order.
Formula
Contribution = net revenue − COGS − shipping − fees − discounts − expected returns − ads
Worked example
Illustrative ₹1,499 order: COGS ₹420, shipping ₹90, fees ₹30, expected RTO allocation ₹80, ads ₹220. Contribution is about ₹659 before overhead.
This term sits in the D2C analytics hub. Use the related pages below for the full playbook.
Frequently asked questions
What does Contribution margin mean for a D2C brand?
Contribution margin is what remains from an order after product cost, shipping, payment fees, discounts, expected RTO/returns and ads. It is the scoreboard for a D2C order.
Where should I track Contribution margin?
Start in the D2C analytics guide and the linked calculators or product pages. MarQet BI is built around this operating problem.