# Contribution margin

A term used when buying e-commerce.

What is left of an order after product, shipping, fees, and the ad spend that won it.

[Gross margin](https://searchspheresource.com/glossary/gross-margin) on a listing tells you almost nothing, because the cost of getting the order is the cost that moves. A store whose advertising has crept from a tenth of revenue to a quarter has already lost most of its profit while the [top line](https://searchspheresource.com/glossary/top-line) kept growing. Ask for contribution margin by product and by channel over twenty-four months, and ask what the return rate does to it, since returns arrive after the ad has been paid for.

Part of: Buying an E-Commerce Business (https://searchspheresource.com/guides/buying-an-ecommerce-business)

Source: https://searchspheresource.com/guides/buying-an-ecommerce-business/terms/contribution-margin
Not dated: The same editorial definitions as the glossary, inside a trade.

Site index for machines: https://searchspheresource.com/llms.txt