Free calculator · Updated 1 Nov 2026
Contribution margin calculator
Gross margin ignores most of what an order costs. This calculator layers the costs in the order you control them, so you can see whether one order made money before you decide how much to spend on ads.
Result
CM3: after ad spend
₹117
11.7% of net revenue
- Net revenue (excluding GST)
- ₹1,000
- CM1: after product cost70% of net revenue
- ₹700
- CM2: after packaging, shipping, fees and returns51.7% of net revenue
- ₹517
Calculated in your browser. Nothing you enter is sent to us.
How it is calculated
- Net revenue = selling price ÷ (1 + GST rate)
- CM1 = net revenue − product cost
- CM2 = CM1 − packaging − shipping − payment fee (with GST on the fee) − expected RTO or return cost
- CM3 = CM2 − ad spend per order
Reading the result
- Use revenue without GST. GST is collected for the government, so it is not yours.
- Treat RTO as a probability times the cost of a failed delivery, not as a share of revenue.
- Use actual ad spend divided by actual orders, not the return your ad platform reports.
Go further
Guide · 6 min readContribution margin per order: a working definitionThe method behind this calculator, with a worked example and the common mistakes.Read the guide →Spreadsheet · ₹1,499Unit Economics ModelIt holds these layers per SKU and per channel in one spreadsheet, with a COD vs prepaid comparison.View Details →