MarginKoala

How much money does each sale leave after direct costs?

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Enter the selling price, product cost and any other cost that happens each time you make a sale. Koala keeps a negative contribution visible when a sale costs more than it brings in.

Finance term: contribution margin. This is before fixed costs and is not final net profit.

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$

Use the direct product or supplier cost for one unit on the same basis as the selling price.

$

For example delivery you pay, card fees, marketplace fees or packaging. Keep fixed costs separate.

units

Use the same period you want the total contribution to describe.

Koala's Calculated Result
What each sale leaves after the variable costs entered — before fixed costs.

Add a positive selling price and sales volume to calculate contribution.

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Frequently asked questions

What is contribution margin?

Contribution margin (sometimes called profit per sale) is the portion of each sale that contributes toward covering your fixed overhead and then profit. It equals sale price minus every variable cost of making and delivering that sale.

Contribution Margin

How is it different from gross margin?

Gross margin and contribution margin use different cost scopes. Gross margin uses the COGS basis in the accounts; contribution margin subtracts the costs the business treats as variable with the sale. Neither is inherently more conservative unless the chosen cost definitions make it so.

Contribution Margin

What's a healthy contribution-margin ratio?

It depends on your business. A bakery selling a $5 muffin at 70% contribution can absorb rent easily; a store selling a $40 item at 15% contribution will struggle to cover the same overhead. The right benchmark is your own: the level at which the leftover pays for fixed overhead plus your target profit.

Contribution Margin

Do fixed costs count?

No. Fixed costs are what contribution margin is meant to cover, not something it deducts. If you are subtracting rent and salaries from per-unit margin, you are looking at operating profit per unit, not contribution margin.

Contribution Margin

Educational use, not financial advice. Numbers are estimates for planning; consult a qualified professional before acting on them.