Contribution Margin Calculator

Joel Brda, Founder & CEO of Human. Last updated: August 31, 2026.

This calculator outputs Human's contribution margin, which is CM3: what's left of net revenue after COGS, shipping and fulfillment, merchant fees, and marketing spend. For the operator guide to CM1 vs CM2 vs CM3, what's in the number, and what's out, read Ecommerce Contribution Margin: The Number That Tells You If Yesterday Made Money. Calculations run locally in the browser. No data is stored.

Formula¶

Net revenue is gross store revenue plus shipping charged to customers, minus discounts, minus refunds. Contribution margin (CM3) is that net revenue minus COGS, shipping and fulfillment, transaction/platform fees, and marketing spend.

Net revenue = Gross store revenue
            + shipping charged to customers
            - discounts
            - refunds

Gross profit = Net revenue - COGS

Contribution margin (Human's contribution margin = CM3)
             = Gross profit
             - Variable costs (non-ad)
             - Ad spend

Same stack in the published manifesto form:

Contribution Margin = Net Revenue
                    - Cost of Goods Sold (COGS)
                    - Shipping & Fulfillment
                    - Transaction/Platform Fees
                    - Marketing Spend

When Human says contribution margin with no qualifier, this is the number. Some blogs put ads in CM2. We put ads in CM3.

Inputs¶

Integrations remain Shopify and BigCommerce. Amazon fields on this page are optional and manual. They are not an Amazon connection.

Ecommerce Revenue: DTC store (Shopify / BigCommerce), before discounts and refunds

Ecommerce Orders: Order count for the same period

Amazon Revenue / Orders: Optional manual fields. Not an Amazon connection.

Shipping & handling charged to customers: Cash in. Added to net revenue, not a cost.

Discounts: Netted out of net revenue

Refunds: Netted out of net revenue

COGS: Dollars, or a percent of net revenue. Pulled from Shopify if you use COGS in Shopify, or a fixed percentage that can be changed in any month.

Variable costs (non-ad): Payment fees, fulfillment, shipping paid by the brand, packaging, and similar

Ad spend: Meta, Google, and other paid media

Worked example (example numbers, not a customer's)¶

Default worked example from this calculator. Not a Human customer's numbers. Not a benchmark.

Gross revenue (ecom + amazon): $300,000

Shipping & handling charged: $8,000

Discounts: $50,000

Refunds: $25,000

COGS: $120,000

Gross profit: $113,000

Gross margin %: 48.5%

Variable costs (non-ad): $60,000

Ad spend: $90,000

Contribution margin (CM3): -$37,000

Contribution margin %: -12.3%

MER: 2.59

A period can show 48.5% gross margin and MER 2.59 and still be -12.3% contribution margin. Gross margin is not the decision number.

How to read the output¶

The dollar contribution margin and the contribution-margin percentage this widget prints are Human's contribution margin, which is CM3: net revenue after COGS, shipping and fulfillment, merchant fees, and ad spend. Gross profit and gross margin % are shown so you can see the gap. They are not the decision number. A mid-40s gross margin can still be CM3-negative once fulfillment, fees, and ads are in.

MER is printed as the widget computes it. On the default period that is net revenue divided by ad spend: $233,000 / $90,000 = 2.59. A MER above 2x did not make that example contribution-margin positive.

Read CM dollars first, then the percentage. The percentage is a rate. The dollars are what cover fixed costs and growth. If CM3 is negative, the period did not contribute cash after the costs that scale with selling.

This is the manual version. Human runs the same number daily in Profit Compass by connecting Shopify and ad platforms, so you are not re-keying last month into a form.

Next step¶

Primary: Request Early Access

Secondary: Prefer to walk it with an operator? See your contribution margin this week

Guide: Read the operator's guide: how Human defines CM1 / CM2 / CM3

Early access includes the first 100 days of the platform free. No dollar price is published here.

FAQ¶

What does this calculator include in contribution margin?¶

COGS, shipping and fulfillment, merchant/transaction/platform fees, packaging (inside variable costs non-ad), and ad spend, after discounts and refunds are netted out of revenue. Shipping charged to customers is added to net revenue. Rent, salaries, and other fixed overhead are out.

Is this CM1, CM2, or CM3?¶

CM3. That is Human's published contribution margin. CM1 is net revenue minus COGS. CM2 is CM1 minus shipping, fulfillment, and merchant fees. Ad spend is the step from CM2 to CM3, not a line inside CM2. Some blogs put ads in CM2. We put ads in CM3. When Human says contribution margin with no qualifier, that is CM3.

Why is my gross margin healthy and my contribution margin negative?¶

Because gross margin only subtracts COGS. Contribution margin also subtracts shipping, fulfillment, fees, and ads. The default example on this page is the illustration: 48.5% gross margin, MER 2.59, and -12.3% contribution margin on the same period.

Does this match my P&L?¶

No, not to the cent, and it is not supposed to. Your books remain the system of record. This calculator is built to be directionally right. Use it to see whether the period made money after the costs that scale with selling, then reconcile to the close.

Can I do this in Shopify natively?¶

No. Shopify does not show contribution margin. You stitch storefront, ads, COGS, shipping, and fees yourself, or you use this calculator / have Human run the number. Published storefronts are Shopify and BigCommerce.