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MarginMeter

Contribution margin

Contribution margin definition for SaaS and AI founders: what it means, how to calculate it, and common pitfalls when reading it in dashboards.

Contribution margin is revenue minus every cost that varies with sales — COGS plus variable selling costs such as commissions or per-transaction fees not already in COGS.

Formula

Contribution margin = Revenue − Variable costs

In practice

Useful per customer or per plan; in V1 MarginMeter reports gross margin, with customer-level economics coming later.

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