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Contribution margin extends gross profit by including additional variable costs that scale with demand (for example, marketing spend).

What it represents

Contribution margin answers: “After variable costs, how much do we have left to cover fixed costs and profit?” Depending on your definition, it may include:
  • Gross profit components (COGS + fulfillment + fees, etc.)
  • Marketing spend (paid media + other variable acquisition costs)
  • Other variable operating expenses (if modeled)

Where to look in SourceMedium

Troubleshooting

If contribution margin is unexpected:
  • Confirm which spend sources are included (integrations vs config sheet)
  • Confirm refunds/cancellations and the revenue definition used