India D2C calculator
Contribution Margin Calculator — CM1, CM2 & CM3 in ₹
Back GST out of Shopify list price, subtract landed COGS, Shiprocket-style fulfilment, COD fees, gateway charges on prepaid share, blended RTO logistics, and performance marketing to see what each order really contributes.
Pricing & GST
List price on Shopify India
Coupons allocated per order
Shopify India list price is usually GST-inclusive.
COGS & fulfilment
Product cost per order
Outbound courier
Per order
Used inside RTO cost
Payments & COD
On prepaid share only
Razorpay / Shiprocket COD charge
RTO & scale
Share of dispatches returned
Attributed performance spend
For monthly CM totals
Results
CM1 (after COGS)
₹736 (62.0% of net revenue)
CM2 (after fulfilment, payment & RTO)
₹587 (49.5%)
CM3 (after marketing)
₹287 (24.2%)
Max CAC you can afford (CM2)
₹587
Net revenue per order (ex-GST)
₹1,186
CM3 monthly total
₹2,86,550
You can spend up to ₹587 per order on acquisition and still cover ops before marketing; CM3 leaves ₹287 after ₹300-style performance spend.
Contribution waterfall (₹ per order)
This calculator provides estimates for learning purposes. Results depend on your inputs and assumptions.
What is contribution margin for D2C in India?
CM1 is net revenue minus landed COGS. CM2 also removes fulfilment, COD fees, payment gateway on prepaid orders, and RTO logistics. CM3 subtracts performance marketing per order. Indian brands usually price GST-inclusive, so net revenue must exclude tax. Use CM2 as the max CAC you can afford before ads; validate campaigns with the ROAS Calculator and RTO Cost Calculator.
How it's calculated
Gross after discount = selling price − coupon. Net revenue = gross ÷ (1 + GST) when price includes GST. CM1 = net revenue − COGS. CM2 = CM1 − forward shipping − packaging − payment costs − RTO rate × (forward + return + packaging). Payment costs = prepaid share × gateway % × gross + COD share × COD fee. CM3 = CM2 − marketing per order.
Worked example (default inputs)
List ₹1,499 with ₹100 discount and 18% GST inclusive → net revenue ≈ ₹1,185.59. After ₹450 COGS, CM1 ≈ ₹735.59. Subtract ₹95 fulfilment, ₹29.29 payment mix, ₹24.75 RTO logistics → CM2 ≈ ₹586.55. After ₹300 marketing, CM3 ≈ ₹286.55 (~24.2% of net revenue). At 1,000 orders/month, CM3 totals about ₹2.87 lakh.
Typical ranges in Indian D2C
Commonly reported directional ranges after variable costs:
| Tier | Range | What it means |
|---|---|---|
| CM3 strong | Often mid-teens %+ of net revenue | More room to scale paid on Shopify India. |
| CM2 vs CAC | CM2 should exceed CAC | If CAC > CM2, you lose money before fixed costs. |
| GST-inclusive pricing | 18% GST common on many SKUs | Backing out tax avoids overstating margin. |
How to improve it
- Negotiate COD and gateway fees at volume. 2) Cut blended RTO with verification and pincode rules. 3) Right-size free shipping thresholds. 4) Bundle high-COGS SKUs with better CM1. 5) Align GST invoices with net revenue reporting.
Frequently Asked Questions about Contribution Margin
- What is contribution margin?
- Profit per order after variable costs — CM1/CM2/CM3 add fulfilment, payments, RTO, and marketing layers.
- What is the difference between CM1, CM2 and CM3?
- CM1 is after COGS only; CM2 adds ops and payment friction; CM3 subtracts marketing.
- Should GST be included in revenue?
- Use net of GST when your Shopify price is tax-inclusive — otherwise margin looks inflated.
- What is a good CM3 for a D2C brand?
- Commonly reported healthy CM3 is often mid-teens percent of net revenue or higher — category and repeat rates matter.
- How does CM2 relate to max CAC?
- CM2 is the per-order budget for acquisition before performance marketing — this calculator labels it max affordable CAC.
- Why is my CM3 negative?
- Marketing plus COD/RTO/payment costs exceed net revenue after COGS — fix CM2 levers before scaling ads.