Contribution Margin

Revenue minus the variable costs of delivering it, per unit or per customer. What's left to cover fixed costs and profit after the direct cost of each sale.

When you'd see it: Unit-economics and pricing analysis. Contribution margin per customer is what funds CAC, overhead, and eventually profit.

Why it matters: Contribution margin is the real test of whether a sale makes money. A product can grow revenue fast and still lose money if its margin is too thin to cover acquisition and overhead.

Common mistakes: Metrics & KPIs