Restaurant Lexicon
Contribution Margin
Contribution margin is the amount left from an order after variable costs, which then contributes to covering fixed 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