What is Contribution Margin?

Contribution margin is revenue minus variable costs attributable to a product or order - the amount available to cover fixed costs and profit.

Why does Contribution Margin matter?

Positive contribution margin means each extra sale helps the business breathe; negative means you pay people to buy from you.

Don't treat “Contribution Margin” as a buzzword - make it a number or behavior you can defend.

Contribution margin is minus attributable to a product or order - the amount available to cover and profit.

Change the lens

Like I'm 5™ is your default. Curious how an investor or beginner would put this?

Try “Like I'm 5™” for a picture-book version - not the grown-up wording above.

Keep scrolling for Like I'm 5™

Learning done · quick check