E-commerce data
Contribution margin (contribution profit)
Revenue minus all variable costs of an order: product cost, shipping, payment fees, returns and often ad spend. Shows what each order adds toward fixed costs and profit.
Contribution margin is revenue minus all the variable costs of an order: product cost, shipping, payment fees, returns and, in most e-commerce definitions, the ad spend that drove it. It shows what each order contributes toward fixed costs and profit, and it is the number that tells you whether growth is worth having.
It is more demanding than gross profit because it needs cost data from several systems: product costs from the store or inventory tool, shipping rates from the carrier or fulfilment provider, fees from the payment processor and spend from the ad platforms. This is exactly the kind of cross-system question MCP is suited to, provided each source is connected and the cost fields are filled in.
When an assistant reports contribution margin, check what it included. Definitions vary, and a figure computed without returns or without payment fees will look better than reality. State the formula you want in the prompt and ask the assistant to list the inputs it used.