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Contribution Profit

Contribution profit is the profit remaining after subtracting all variable costs directly tied to each sale — including marketplace fees, fulfillment and shipping costs, and variable PPC.

Why It Matters

  • •Reflects true SKU-level economic performance before overhead.
  • •Helps determine which SKUs contribute to covering fixed expenses.
  • •More informative than gross profit when evaluating individual product economics.

Connection to Capital

Contribution profit shows how much value each sale contributes toward recovering capital and generating additional returns.

Related Terms

Gross Profit (GP) Net Profit (Net Income) Allocation of Capital

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