Definition

Contribution margin

Revenue minus variable costs. What remains after paying for everything that scales with each unit sold — shipping, processing, returns, packaging. Must be sufficient to cover fixed expenses and generate profit. The number that tells you whether each sale is helping or hurting.

From the episode “Congrats on the Revenue. Sorry About Your Money.”

How founders on the podcast use it

What is left from a sale after all variable costs, including landed cost of goods, shipping, and platform fees. The number Matt optimizes against instead of ROAS.

$7,500 AI Team Replacing an Entire Growth Department

Hear it on the podcast2 episodes

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