Net revenue − landed product cost
A product-level view before fulfillment, payment, returns and acquisition.
Net revenue − product − fulfillment − fees − expected returns
The simple first-order ceiling available for acquisition cost, overhead and profit.
Pre-ad contribution − acquisition cost
The modeled contribution left after acquiring the order, before fixed overhead and tax.
Net revenue ÷ pre-ad contribution
The advertising ratio at which modeled first-order contribution reaches zero.
Solve price where modeled profit = 0
A lower-bound planning threshold after the entered variable cost stack.
Contribution ÷ net revenue
A comparable percentage for evaluating offers, channels and acquisition ceilings.
One revenue number, several different profit layers.
Suppose an order has $60 net revenue, $18 product cost, $6 shipping subsidy, $3 fulfillment, $2.10 payment/platform fees and $1.44 expected return loss. Before advertising, the order has $29.46 of contribution available for acquisition cost, overhead and profit.
If acquisition costs $8, the modeled profit per order becomes $21.46 before fixed overhead and tax. The point of the stack is not the illustrative values; it is making every layer explicit so one metric is not mistaken for another.
Use the right layer for the decision
- Gross margin is useful for product economics but usually too generous for ad decisions.
- Pre-ad contribution is the relevant ceiling for first-order acquisition in a simple model.
- Post-acquisition contribution tells you what is left to support overhead, tax and profit.