Contribution Margin
Contribution margin is the amount left from an order after variable costs, which then contributes to covering fixed costs.
1 min readMargin & costs
Why it matters
Variable costs are everything incurred per order — food cost, packaging, payment and platform fees. What remains covers rent, staff and energy, and is ultimately profit.
For restaurants, contribution margin per order is a more honest metric than revenue: two channels with identical revenue can have very different contribution margins — which is exactly what the Marketplace Tax exposes.
Formula
Contribution margin = Revenue − variable costs