Ecommerce & profit
Contribution Margin Calculator
Find the percentage of revenue remaining after variable costs to support fixed expenses and profit.
Use this to study order economics or cost-volume behavior before fixed overhead. Use net profit margin for an all-expense bottom line.
What the result means
Contribution margin is the share available to cover fixed costs and then profit. A negative result means variable costs alone exceed sales. State whether advertising is included when comparing results.
The formula
((Net revenue - total variable costs) / net revenue) * 100
Results are displayed to at most two decimal places. Calculations use the unrounded inputs.
A worked example
Put the formula to work
- Net revenue (currency)
- 20,000
- Total variable costs (currency)
- 12,000
Contribution margin percentage: 40%
Sales of 20,000 minus 12,000 variable costs leave 8,000 contribution, or 40% of sales.
How to use this calculator
- Choose a sales scope with a consistent product and channel mix.
- Separate variable costs from costs that remain fixed over the relevant range.
- Subtract variable costs from net revenue.
- Express that contribution as a percentage of revenue.
Why this number matters
Contribution margin links additional sales to the funds available for overhead, making it useful for product mix and break-even planning.
Input definitions
- Net revenue (currency)
- Net sales for the product, order cohort, or period being analyzed; must be greater than zero.
- Total variable costs (currency)
- Costs that vary with these sales, including goods, fulfillment, fees, and variable acquisition costs if in scope.
Assumptions and limitations
- Not net margin: fixed expenses, interest, and taxes may remain unpaid.
- Cost behavior can change at volume thresholds or capacity limits.
- A blended percentage can obscure loss-making products or channels.
Methodology
The default result and worked example use the same calculation functions as the interactive tool. The formula cannot verify the quality or scope of your source data.
Read our calculation methodology
Last updated .