Glossary · Profit
Contribution margin
What the orders earned after VAT, goods, shipping, fees and refunds — before any ad was paid for and before fixed costs. It is what pays for both.
- Contribution before ads€4,10651.7% of sales
- Ads it paid for€1,180July 2026
- Fixed costs it paid for€405rent, tools, people
01 / How it is worked out
The formula
Formula
(Sales − VAT − refunds − cost of goods − shipping − payment fees) ÷ sales
Example
The example store’s July 2026 contributed €4,106 before ads — 51.7% of €7,940 in sales.
02 / Why it matters
What it changes in a decision
Contribution is the money a sale leaves to pay for everything that does not change with each order: the ads that bring the orders, and the fixed costs that keep the shop open.
It is the number that decides how much an ad can cost, how deep a discount can go and how many orders a month has to sell to break even.
03 / Go further
Where it is used
Discount break-even
How deep a sale can go, and how many more units it has to sell.
Open →Product profit
Which products earn and which only sell — margin by product, after their own costs.
Open →Next: Cost of goods sold (COGS)
What the products sold cost the store to buy or make. It does not fall when the price does, which is why discounts eat margin so fast.
Open →
See every one of these on your own store.
Profflow works them out from your orders, ads and costs, order by order — read-only, in about ten minutes.