Contribution Margin Calculator

Calculate contribution margin from price and variable cost per unit — the figure the Break-Even ROAS and Break-Even CPA calculators need.

Add up every non-advertising cost that scales with the sale: cost of goods sold, shipping, payment processing, marketplace or platform fees, and fulfillment.

Formula

Contribution Margin = Price − Variable Cost per Unit

Contribution margin is not the same as gross margin. Gross margin usually subtracts only cost of goods sold. Contribution margin subtracts every non-advertising cost that scales with the sale — if you leave out payment processing, shipping, or marketplace fees, the result will be too high.

Worked Example

A product sells for $100. Cost of goods is $40, payment processing is $3, and fulfillment is $7 — a total variable cost of $50. Contribution margin = $100 − $50 = $50 (50%).

Use this percentage directly in the Break-Even ROAS Calculator or the Break-Even CPA Calculator.