Free tools / Contribution margin calculator
Free calculator · runs in your browserYour revenue looks fine. What's your real margin?
Most stores manage to revenue and gross margin and quietly lose money on the next sale. Enter your numbers to see the full contribution-margin ladder (CM1 to CM3) and the break-even ROAS your ads actually need.
Your numbers
HealthyAround the 25% DTC median; a real business underneath.Margin-True Benchmark (Finaloop 2024-25, 7-8 figure DTC).
Real contribution margin (CM3)
29.6%
A$35.52 kept per order, after every variable cost incl. ads
Break-even ROAS
2.09x
Below this, ads lose money
CM1 (after COGS)
60.0%
A$72.00
CM2 (after fulfilment)
47.9%
A$57.52
Net revenueA$120.00100.0%
CM1 · after COGSA$72.0060.0%
CM2 · after fulfilmentA$57.5247.9%
CM3 · after ad spendA$35.5229.6%
Where each A$120 of price goes
COGSShippingFeesAd costProfit (CM3)
Want this across your whole store, reconciled to source?
How this is calculated
Every figure is derived from your inputs on a per-order basis. The ladder strips one layer of cost at a time:
CM1 = price − COGS
CM2 = CM1 − shipping − fees − packaging − returns − chargebacks
CM3 = CM2 − ad cost per order
break-even ROAS = 1 ÷ (CM2 ÷ revenue)
CM2 = CM1 − shipping − fees − packaging − returns − chargebacks
CM3 = CM2 − ad cost per order
break-even ROAS = 1 ÷ (CM2 ÷ revenue)
Verdict bands come from the Blufire Margin-True Benchmark (Finaloop 2024-25, seven and eight figure DTC brands): a ~25% CM3 median, with 20-25% the sustainable floor and 35%+ strong enough to scale paid. The arithmetic is currency-agnostic, so it applies natively to AUD. Worked figures are demonstrative.
Questions
Contribution margin is what's left after every cost that moves with a sale: product, shipping, payment fees, returns and variable marketing. Gross margin stops at product cost. Two stores with the same gross margin can have completely different contribution margins once fulfilment and ad cost are in, and contribution margin is the number that decides whether the next sale makes you richer.
CM1 is revenue minus landed COGS (gross margin). CM2 is CM1 minus fulfilment, payment and transaction costs. CM3 is CM2 minus variable marketing (your ad cost). CM3 is the cleanest test of whether growth is paying for itself.
Break-even ROAS is one divided by your pre-ad contribution margin (CM2 as a share of revenue). If CM2 is 40% of revenue, break-even ROAS is 2.5x: below that, each advertised sale loses money once costs are in.
From our Margin-True benchmark of seven and eight figure DTC brands, the median CM3 is about 25%. Below 20% growth is borrowing from the future; 25-35% is healthy; 35%+ is strong enough to scale paid hard and still profit.
No. The calculator runs entirely in your browser. Nothing is sent anywhere unless you choose to email yourself the result.
See this across your whole store, reconciled.Blufire computes the same ladder on your live Shopify, ads and email data, then hands you the highest-value move.