{
  "slug": "contribution-margin-sku",
  "title": "Contribution Margin Per SKU Calculator",
  "heading": "Contribution Margin Per SKU Calculator",
  "category": "financial",
  "url": "https://www.revenuelab.fyi/toolbox/contribution-margin-sku",
  "summary": "See which products actually make money after every variable cost.",
  "description": "Revenue per SKU tells you what sells; contribution margin tells you what's worth selling. A bestseller with thin margin after fees, shipping, and returns can drag down profitability more than a slower SKU with fat margin. This calculator takes a single SKU's sale price and subtracts COGS, payment/marketplace fees, average shipping cost, and an allocated returns cost, giving you contribution margin dollars and percentage per unit, then multiplies by monthly unit volume to show total monthly contribution. Run this across your catalog (one SKU at a time) to rank products by total dollar contribution rather than revenue or unit volume alone, since a SKU selling 500 units a month at $2 margin ($1,000 total) may matter less to your bottom line than one selling 80 units at $18 margin ($1,440 total), despite looking far less impressive on a bestseller report.",
  "formula": "Contribution margin/unit = price − COGS − fees − shipping − (returns rate × price); Total monthly contribution = margin/unit × units sold.",
  "dateModified": "2026-09-30",
  "run_url": "https://www.revenuelab.fyi/api/public/calc?tool=contribution-margin-sku",
  "inputs": [
    {
      "id": "price",
      "label": "Sale price",
      "kind": "number",
      "hint": null,
      "default": 34,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "cogs",
      "label": "Cost of goods",
      "kind": "number",
      "hint": null,
      "default": 11,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "fees",
      "label": "Payment/marketplace fees per unit",
      "kind": "number",
      "hint": null,
      "default": 4.5,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "shipping",
      "label": "Average shipping cost",
      "kind": "number",
      "hint": null,
      "default": 6,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "returnsRate",
      "label": "Returns rate",
      "kind": "number",
      "hint": null,
      "default": 8,
      "unit": "%",
      "min": 0,
      "max": 100
    },
    {
      "id": "unitsMonth",
      "label": "Units sold per month",
      "kind": "number",
      "hint": null,
      "default": 250,
      "unit": null,
      "min": 0,
      "max": null
    }
  ],
  "outputs": [
    {
      "id": "cmUnit",
      "label": "Contribution margin per unit",
      "format": "currency",
      "hint": null,
      "primary": true
    },
    {
      "id": "marginPct",
      "label": "Contribution margin %",
      "format": "percent",
      "hint": null,
      "primary": false
    },
    {
      "id": "totalMonthly",
      "label": "Total monthly contribution",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "returnsCost",
      "label": "Allocated returns cost per unit",
      "format": "currency",
      "hint": null,
      "primary": false
    }
  ],
  "worked_example": {
    "inputs": [
      "Sale price: 34 $",
      "Cost of goods: 11 $",
      "Payment/marketplace fees per unit: 4.5 $",
      "Average shipping cost: 6 $",
      "Returns rate: 8 %",
      "Units sold per month: 250"
    ],
    "outputs": [
      "Contribution margin per unit: $9.78",
      "Contribution margin %: 28.8%",
      "Total monthly contribution: $2,445",
      "Allocated returns cost per unit: $2.72"
    ]
  },
  "how_to": {
    "title": "How to use this",
    "steps": [
      "Enter sale price ($).",
      "Enter cost of goods ($).",
      "Enter payment/marketplace fees per unit ($).",
      "Enter average shipping cost ($).",
      "Enter returns rate (%).",
      "Enter units sold per month.",
      "Read your contribution margin per unit on the right — it updates as you type.",
      "Hit Share to keep the scenario or send it to someone."
    ]
  },
  "scenarios": [
    {
      "name": "Conservative",
      "description": "Lower-end numbers — what if things land soft?",
      "values": {
        "price": 20,
        "cogs": 6.6,
        "fees": 2.6999999999999997,
        "shipping": 3.5999999999999996,
        "returnsRate": 5,
        "unitsMonth": 150
      }
    },
    {
      "name": "Typical",
      "description": "Defaults — the most common real-world setup.",
      "values": {
        "price": 34,
        "cogs": 11,
        "fees": 4.5,
        "shipping": 6,
        "returnsRate": 8,
        "unitsMonth": 250
      }
    },
    {
      "name": "Ambitious",
      "description": "Higher-end numbers — what if things really pop?",
      "values": {
        "price": 54,
        "cogs": 17.6,
        "fees": 7.2,
        "shipping": 9.600000000000001,
        "returnsRate": 13,
        "unitsMonth": 400
      }
    }
  ],
  "limitations": [
    "Results are estimates before tax, fees, and inflation unless an input explicitly covers them.",
    "Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.",
    "This is educational maths, not financial advice. Check anything contractual with the lender or your accountant."
  ],
  "faq": [
    {
      "q": "How is this different from gross margin?",
      "a": "Gross margin usually only subtracts COGS. Contribution margin subtracts every variable cost tied to selling and fulfilling that unit — fees, shipping, and returns — leaving the actual dollars available to cover fixed costs and ad spend."
    },
    {
      "q": "Should I include fixed overhead like warehouse rent?",
      "a": "No, that's the point of contribution margin versus net margin. Fixed costs don't vary with units sold, so keep them out of this per-SKU number and instead check whether total contribution across all SKUs covers your fixed costs in a separate breakeven calculation."
    },
    {
      "q": "How should I use this to prioritize inventory?",
      "a": "Rank SKUs by total monthly contribution, not by margin percentage or unit volume alone. A high-margin SKU with low volume might contribute less total profit than a modest-margin SKU that sells in bulk, and that total dollar number is what should drive reorder priority."
    },
    {
      "q": "What if a SKU has negative contribution margin?",
      "a": "That SKU is losing money on every sale before fixed costs even enter the picture. Either raise the price, renegotiate COGS or shipping, or discontinue it, since no amount of volume fixes a negative per-unit contribution."
    }
  ],
  "related": [
    "https://www.revenuelab.fyi/toolbox/gmroi-calculator",
    "https://www.revenuelab.fyi/toolbox/sell-through-rate",
    "https://www.revenuelab.fyi/toolbox/returns-rate-cost"
  ],
  "license": "CC-BY-4.0",
  "citation": "RevenueLab — Contribution Margin Per SKU Calculator (https://www.revenuelab.fyi/toolbox/contribution-margin-sku)"
}