The split decides how a brand should think about growth. Contribution margin covers variable costs only, so it shows what each extra order adds. Fixed costs are covered by the total contribution of all orders.
Marketing is a special case: ad spend is usually treated as variable because it scales with orders, while brand campaigns and retainers behave like fixed costs.
CM1, CM2, CM3 and EBITDA per order and per month, with RTO, COD, channel comparison and a board-ready report.
Related terms
- Contribution margin (CM1, CM2, CM3)Contribution margin is the revenue left from a sale after the variable costs of…
- Break-even pointThe break-even point is the sales volume at which total contribution exactly…
- EBITDAEBITDA is earnings before interest, tax, depreciation and amortisation: operating…
Part of the growth marketing glossary by Shiva Sharma.