What is a contribution margin in e-commerce?

Contribution margin is the true per-order profit after subtracting all variable costs including COGS, customer acquisition cost (CAC), shipping, payment gateway fees, and the blended impact of returns. It's more accurate than gross margin because it accounts for hidden operational costs.

Why is my Shopify dashboard profit different from actual profit?

Standard Shopify dashboards typically show gross revenue and basic COGS deductions, but they obscure hidden costs like payment gateway fees (2-3% per transaction), blended return rate costs, and full fulfillment costs. This 'hidden bleed' can reduce your actual margin by 15-25%.

How do you calculate the hidden bleed in e-commerce orders?

Hidden bleed = Payment Gateway Cost + Return Cost + Shipping Cost. Gateway Cost is calculated as (AOV × Gateway Fee %) + Fixed Fee. Return Cost is AOV × Return Rate %. These are costs that standard e-commerce dashboards typically don't surface at the order level.

Free Tool

True Order Profit & Leak Calculator

Your Shopify dashboard lies to you. It shows gross revenue and hides the real costs bleeding your margins — gateway fees, blended return costs, and fulfillment overhead. Calculate your actual per-order contribution margin in real time.

Order Economics

Adjust sliders or type exact values

Average Order Value

₹

Your store's average cart value after discounts

Cost of Goods Sold

₹

Direct product cost including raw materials & manufacturing

Customer Acquisition Cost

₹

Blended cost per order (Meta, Google, influencer, etc.)

Pick, Pack & Ship

₹

Total fulfillment cost per order

Return Rate

Percentage of orders that get returned or refunded

Payment Gateway Fee

Variable % charged per transaction (Razorpay, Stripe, etc.)

Gateway Fixed Fee

₹

Fixed fee per transaction (if any)

Shopify Gross View

₹1,500.00

What your dashboard shows you

The Hidden Bleed

−₹310.00

Gateway Cost₹30.00

Return Cost₹180.00

Pick, Pack & Ship₹100.00

Costs your standard dashboard obscures

True Net Cash

₹390.00

True Margin:26.0%

Per-Order Cost Breakdown

COGS₹500.00 (33.3%)

CAC₹300.00 (20.0%)

Shipping₹100.00 (6.7%)

Gateway₹30.00 (2.0%)

Returns₹180.00 (12.0%)

Find exactly which products are causing these leaks.

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Why Standard Dashboards Get Your Margins Wrong

Most e-commerce brands track revenue and COGS, then assume the difference is profit. But this "gross margin" view ignores three critical cost layers that can erode 15-25% of your perceived margin:

Payment Gateway Fees— Every transaction costs you 2-3% (plus fixed fees). On a ₹1,500 order, that's ₹30-45 silently deducted.
Blended Return Costs— A 12% return rate doesn't just lose revenue — it costs you shipping both ways, restocking labor, and sometimes unsellable inventory.
True Fulfillment Costs — Pick, pack, and ship costs are often buried in monthly aggregate reports, not attributed per order.

This calculator gives you the true contribution margin per order — the metric that actually determines whether your business is scaling profitably or just scaling.

Why Standard Dashboards Get Your Margins Wrong

Most e-commerce brands track revenue and COGS, then assume the difference is profit. But this "gross margin" view ignores three critical cost layers that can erode 15-25% of your perceived margin:

Payment Gateway Fees— Every transaction costs you 2-3% (plus fixed fees). On a ₹1,500 order, that's ₹30-45 silently deducted.
Blended Return Costs— A 12% return rate doesn't just lose revenue — it costs you shipping both ways, restocking labor, and sometimes unsellable inventory.
True Fulfillment Costs — Pick, pack, and ship costs are often buried in monthly aggregate reports, not attributed per order.

This calculator gives you the true contribution margin per order — the metric that actually determines whether your business is scaling profitably or just scaling.