Contribution margin P&L builder: CM1, CM2, CM3 to EBITDA
The number that decides whether growth makes money. Enter one order's economics and your monthly volume; see CM1, CM2, CM3 and EBITDA, what moves profit most, and which channel keeps the most.
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Monthly P&L
What moves profit most monthly EBITDA, each lever 10% better
Channel comparison CM per order and per 100 of sales
Scenarios side by side
What to do next
How it is calculated
The builder works per order placed, because that is what ad platforms count, then scales to the month. Contribution margin is built in three layers so you can see where the money leaks.
CM1 = Net revenue − product cost CM2 = CM1 − shipping, reverse logistics, packaging, payment and COD fees CM3 = CM2 − performance and brand marketing per order EBITDA = CM3 × orders − fixed costs
Net revenue strips out GST and the revenue lost to undelivered (RTO) and returned orders. Product cost counts the units that are sold plus the share of returned stock that cannot be resold. Reverse shipping is charged on every RTO and return. In India, COD fees apply only to COD orders that are delivered, and gateway fees only to prepaid orders.
Reading the result
CM2 tells you whether the product and operations make money before any marketing. If CM2 is negative, more ad spend only deepens the loss. CM3 tells you whether today's marketing is paid for. Break-even ROAS is the selling price divided by CM2: below it, the first order loses money. The sensitivity ranking moves each input 10% in the helpful direction and ranks the change in monthly EBITDA, so you know which lever to pull first.
Questions
What are CM1, CM2 and CM3?
They are three layers of contribution margin. CM1 is net revenue minus product cost. CM2 also deducts the variable costs of getting the order to the customer: shipping, returns, packaging and payment fees. CM3 also deducts marketing. EBITDA then deducts fixed costs.
How do you calculate contribution margin per order?
Start with the price the customer pays, remove GST, then remove the revenue lost to RTO and returns to get net revenue. Subtract product cost for CM1, then shipping, reverse logistics, packaging and payment costs for CM2, then marketing per order for CM3.
How does RTO affect contribution margin?
An RTO order earns no revenue but still costs forward and reverse shipping, packaging and sometimes damaged stock. With high COD shares, RTO is often the single biggest leak in an Indian D2C P&L. The builder shows the monthly cost of RTO against perfect delivery.
What is a good contribution margin for D2C?
It depends on category and stage, but a healthy D2C brand typically aims for CM2 well above its marketing cost per order so CM3 stays positive as it scales. If CM3 is negative, growth is being bought at a loss, which only works with proven repeat revenue.
Why compare channels like Amazon and quick commerce?
Marketplaces and quick commerce sell more but take commissions, fixed fees and advertising. Comparing contribution per 100 of sales shows which channel keeps the most, so inventory and budget can follow profit rather than revenue.
Is my data stored?
No. The calculation runs in your browser. Nothing is saved unless you create a report, which stores your inputs in your private Gran workspace so you can reopen and edit it.
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