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What Is Contribution Margin?

Contribution Margin the amount each sale contributes to covering fixed costs and generating profit, calculated as selling price minus all variable costs (COGS, fees, shipping, commissions).

How Dashboardly Tracks Contribution Margin

Dashboardly calculates Contribution Margin from your live TikTok Shop data — pulling actual orders, fees, refunds, and returns so the number you see matches your P&L.

  • Actual order revenue — not estimated or attributed revenue
  • Refunds and returns deducted automatically
  • All platform fees included for profit-level accuracy
  • Historical trends so you spot changes before they hit profit

Frequently asked questions

What is a good Contribution Margin?

Healthy: 30-50% of selling price. Below 20% makes it hard to cover fixed costs.

How do I calculate Contribution Margin?

Contribution Margin = Selling Price - Variable Costs Per Unit

Why is my Contribution Margin different from what TikTok Shop reports?

TikTok's native reports use attributed metrics with click- and view-through windows. Dashboardly calculates Contribution Margin from actual order revenue, deducting refunds and returns for a truer number that matches your real P&L.

When should I track Contribution Margin?

Contribution Margin is a leading indicator — check it daily if you're running ads or running pricing experiments, weekly otherwise. Dashboardly tracks Contribution Margin automatically so you don't have to pull exports.

Related tools & resources

Our complete walkthrough of Contribution Margin: What Is GMV on TikTok Shop — And Why It's Not Your Revenue.

The amount each sale contributes to covering fixed costs and generating profit, calculated as selling price minus all variable costs (COGS, fees, shipping, commissions).
Definition

The amount each sale contributes to covering fixed costs and generating profit, calculated as selling price minus all variable costs (COGS, fees, shipping, commissions).

Formula

Contribution Margin = Selling Price - Variable Costs Per Unit

Example Calculation

$29.99 - $19.19 variable costs = $10.80 contribution margin (36%)

Benchmarks for TikTok Shop Sellers

Healthy: 30-50% of selling price. Below 20% makes it hard to cover fixed costs.

Why It Matters for TikTok Shop Sellers

The amount each sale contributes to covering fixed costs and generating profit, calculated as selling price minus all variable costs (COGS, fees, shipping, commissions).

Related Terms

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