Revenue minus variable costs.
Definition
Revenue minus variable costs.
Why it matters
It shows profit available to cover fixed costs.
How it works
Revenue − variable costs
Example
₹1,000 sale with ₹600 variable costs leaves ₹400.
Common mistake
Excluding returns.
Using it in practice
Review Contribution Margin alongside related metrics rather than in isolation, and agree definitions across your team so reports stay consistent.
Need help putting this into practice?
Gravmo's team can plan and run this for you. See D2C Performance Marketing or message us on WhatsApp.
Ask on WhatsAppFrequently asked questions
Is Contribution Margin the most important metric?
No single metric tells the whole story; use it with business outcomes.
How often should we review Contribution Margin?
Monthly for most businesses, weekly during active campaigns.
