Contribution margin per order

What one transaction contributes after every variable cost attached to it, including delivery, payment charges, packaging and the discount funded by the platform.

An order with ₹420 of net revenue, ₹260 of cost of goods and ₹95 of fulfilment and payment costs contributes ₹65.

This is the number that decides whether a consumer internet business can ever work. Positive contribution and a loss means the fixed base is too large for current volume, which scale fixes. Negative contribution means every additional order makes the loss bigger, which scale makes worse.

Companies present layered versions, and the layers matter. A first-level contribution margin that excludes delivery cost at a delivery business is measuring the business without its largest variable cost.

Read which costs each layer contains.