--- title: "Contribution margin per order calculator" description: "What one order keeps after product cost, pick and pack, packaging, the label, card fees and a refund reserve, as an amount, a share of revenue and the ROAS your ads break even at." url: https://offersuite.io/calculators/contribution-margin-per-order updated: 2026-10-13 --- # Contribution margin per order calculator Gross margin stops at the product's cost. An order also pays to be picked, boxed, shipped and charged to a card, and some of its revenue comes back as refunds. Contribution margin is what is left after all of it: the amount one more order adds to the business, and the most you can spend to win that order. ## Result This order keeps **$37.24**, 48.4% of the $77.00 the customer pays. That is the most you can spend to win it: ads break even at a ROAS of **2.07**. ### This order Revenue $77.00 to contribution margin $37.24 (48.4%) Revenue $77.00 Cost of goods −$24.00 Pick and pack −$1.18 Extra picks −$0.20 Packaging −$0.50 Shipping label −$7.50 Card fee per order −$0.30 Refunds −$3.85 Card processing −$2.23 Contribution margin $37.24 1 declared kind costs nothing on this option Margin per order, 2 units | Per order | This order | | --- | --- | | Revenue | $77.00 | | Cost of goods | −$24.00 | | Pick and pack | −$1.18 | | Extra picks | −$0.20 | | Packaging | −$0.50 | | Shipping label | −$7.50 | | Card fee per order | −$0.30 | | Refunds | −$3.85 | | Card processing | −$2.23 | | Contribution margin | $37.24 | | Margin % | 48.4% | **Contribution margin per order** $37.24 **Contribution margin %** 48.4% **Costs of the order** $39.76 **Break-even ROAS** 2.07 The order keeps $37.24, 48.4%. Break-even ROAS 2.07 ## Your numbers **The order** What the customer pays for products $72.00 After any discount, before shipping and tax. Units in the order 2 Product unit cost $12.00 Shipping charged $5.00 **Fulfilment and payment** Pick and pack, per order $1.18 Each extra item picked $0.20 Box and packing, per parcel $0.50 Shipping label, per parcel $7.50 Card processing rate 2.9% Card fee per order $0.30 Refund reserve 5% The share of revenue you expect to refund. [Reset to the example](https://offersuite.io/calculators/contribution-margin-per-order) ## How it's calculated - Revenue = what the customer pays for products + shipping charged - Contribution margin per order = revenue − unit cost × units − pick and pack − extra picks − packaging − label − card fees − refund reserve - Contribution margin % = contribution margin ÷ revenue - Break-even ROAS = revenue ÷ contribution margin: below it, the ad spend behind the order is more than the order keeps Every figure on this page comes from Offer Suite's own margin engine, the same code the product uses to forecast each offer's and option's profit and to compute realized margin on orders. Money is computed in whole cents. ## Worked example A customer buys 2 bags of coffee for $72.00 and pays $5.00 shipping: $77.00 of revenue. The bags cost $24.00. The warehouse charges $1.18 to pick and pack the order and $0.20 for the second bag; the box is $0.50 and the label $7.50. Card fees come to $2.23 plus $0.30, and $3.85 is set aside for refunds. All of it adds up to $39.76, so the order keeps **$37.24**, a contribution margin of 48.4%. Ads that return less than 2.07 times their spend cost more than this order keeps. ## Assumptions - The order ships in one parcel: one label, one box, one pick and pack, and one extra pick for each unit after the first. - Tax is left out on both sides: it is collected for the state and is not revenue. - Ad spend and overheads are not costs of the order. Contribution margin is what the order leaves to pay for them. - Pick and pack $1.18 per order and $0.20 for each extra item are the defaults of the engine's DTC-US profile, a typical third-party warehouse contract. Use your own contract. - The shipping label ($7.50) is an assumption for a domestic ground parcel of about a pound. Your carrier account or shipping app has your rate. - Card processing of 2.9% + $0.30 is Shopify Payments' online rate for a standard card on the Basic plan in the United States. The Shopify Payments fees pages list every plan and country; enter yours. - The refund reserve (5%) is a share of revenue set aside for refunds. Cost is not reduced by a refund, because the goods were already picked and shipped. ## Questions ### What is contribution margin per order? What one order keeps after every cost that exists only because the order does: the products in it, the pick and pack, the box, the label, the card fee and the refunds expected on it. Rent, salaries and ad spend are paid out of it; they are not part of it. ### What is the formula for contribution margin per order? Revenue from the order, including shipping charged, minus its variable costs: unit cost times units, fulfilment, packaging, the shipping label, card processing and a refund reserve. Divide by revenue for the contribution margin percentage. ### How is contribution margin different from gross margin? Gross margin subtracts only the cost of the goods. Contribution margin also subtracts what it costs to fulfil and charge the order. A product at 70% gross margin can keep half of that once a label and a card fee come out of a small order. ### How does contribution margin set an ad budget? An order cannot pay more for its own acquisition than it keeps. Revenue divided by contribution margin is the return on ad spend at which the first order breaks even; a subscription or a repeat buyer can justify less, which the subscription payback calculator works out. ## Embed this calculator Paste this where you want the calculator. It opens on the numbers above, recalculates as your readers change them, and links back to this page. **Show the embed code** ``` ``` ## See what your own offers earn. Offer Suite opens to Shopify brands a few at a time. Join the waitlist, or ask for a free profit audit of your past orders: realized profit per item and per offer option, what each costs you, and where margin leaks. [Join the waitlist](https://offersuite.io/waitlist) [Request a free profit audit](https://offersuite.io/profit-audit) ## Related - [Calculators **Profit calculators for Shopify offers** Calculators for contribution margin per order, break-even discounts, average order value, shipping by weight and zone, card fees, Amazon and TikTok Shop fees, break-even ROAS and CPA, upsell funnels, gifts, subscriptions, bundles and free-shipping thresholds, each run on Offer Suite's margin engine.](https://offersuite.io/calculators) - [Feature **Forecast and realized profit per offer option** Forecast and realized profit per offer, option, version, item and traffic source from one margin engine in whole cents, with ad spend, realized CAC and subscription LTV.](https://offersuite.io/features/profit) - [Feature **A cost ledger that restates the past** Costs live in an append-only, dated ledger: a correction recosts past orders in the current view; the as-recorded view keeps what each order was booked with.](https://offersuite.io/features/costs) - [Glossary **Contribution margin: definition and formula** What an order keeps after every cost that grows with it: product cost, fulfilment, shipping, card fees and refunds. The number an offer should be judged on.](https://offersuite.io/glossary/contribution-margin) - [Calculator **Break-even discount calculator** How many more buyers a discount has to bring to earn what full price earns, with the discount taken out of the order's margin after shipping, fees and refunds.](https://offersuite.io/calculators/break-even-discount) - [Calculator **Average order value (AOV) calculator** Average order value from revenue and orders, what the average order keeps after per-order costs, and what adding a few dollars to it is worth a month.](https://offersuite.io/calculators/average-order-value)