What is D2C Contribution Margin Analysis?
Nexa Consultancy | Startup & Finance Glossary
For a D2C brand, contribution margin is the revenue from a sale minus all variable costs associated with that sale (COGS, payment gateway fees, shipping, packaging, and marketing). It shows the true profitability of each order.
Startup Example: A D2C brand sells a product for ₹2000. COGS is ₹500, shipping is ₹100, and marketing cost per order is ₹400. The contribution margin is ₹1000. This shows how much is left to cover fixed costs like salaries and rent.
This analysis is central to our work with D2C brands.