Calculator
Is a ₹1,499 order actually profitable?
Work out contribution per order after COGS, shipping, payment fees, discounts, expected RTO and ads. The number a D2C founder should watch instead of revenue.
Short answer
Contribution margin is net money left from one order after product cost, shipping, fees, discounts, expected returns/RTO and ads. If this number is negative, more orders make the business worse.
Calculator
Illustrative defaults for a mid-priced D2C SKU.
RTO / return allowance
₹168
Net after allowance
₹1,231
Contribution per order
₹471
31.4% of selling price
Contribution per order
Net = selling price − discount − expected RTO/return allowance
Contribution = net − COGS − shipping − payment fee − ads per order
Margin % = contribution / selling price
- — Expected RTO allowance = selling-price or COGS-plus-shipping × RTO rate, depending on whether you recover the product.
- — Defaults are illustrative INR figures for a mid-priced D2C SKU.
Frequently asked questions
Should ads sit inside contribution?
For paid-heavy D2C, yes — first-order contribution after ads tells you whether the next rupee of spend is worth it. You can also look at contribution before ads and compare it to CAC separately.
Is this the same as gross margin?
No. Gross margin is usually price minus COGS. Contribution here also pulls in shipping, fees, RTO and ads — the costs that decide whether an Indian D2C order is real.
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