Glossary

What is Contribution margin?

Also called contribution after ads

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.

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