Who this guide helps
DTC operators reviewing economics
The short answer
Subtract variable order costs from net order revenue using a consistent definition. Contribution margin is not company profit because fixed and other costs may remain.
Practical workflow
In an illustrative order, revenue after discounts is 100 units. Product cost is 45, fulfillment 10, payment fees 3 and variable support or return allowance 7; the subtotal contribution is 35. Add acquisition cost separately if your definition includes it. Use your own verified figures and avoid mixing tax collections with revenue.
What a useful handoff looks like
Compare scenarios with different return or delivery costs. State whether acquisition, taxes and fixed overhead are included. Reconcile actual transactions to your accounting process before using the result operationally.
Mistakes to avoid
Do not advertise these invented inputs as market benchmarks or confuse a positive order contribution with overall profitability.
Working example: fields to record
| Field | Illustrative entry — replace with your own facts |
|---|---|
| Revenue basis | Net of actual discounts |
| Variable cost | Verified fulfillment or payment fee |
| Excluded item | Fixed overhead explicitly stated |
Add your own entries; the example is illustrative. Keep sensitive information private.
Sources & further checks
Official references are starting points for further checks, not approval of a specific case, product or project.
Editorial note
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Original editorial guidance. Examples are illustrative, not client cases, measured outcomes or promised services.
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