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What is CM?

Contribution Margin
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What is left from a sale after every variable cost: COGS, shipping, payment fees, fulfilment, and the marketing cost to win it. Contribution margin, not gross margin, is the money actually available to cover overheads and profit. Track it at two levels: before marketing (what funds acquisition and overheads, and the number to use in LTV) and after marketing (what a first order really adds once you have paid to acquire the customer) - mixing the two double-counts CAC. Most founders who think they have a marketing problem actually have a contribution-margin problem, the maths never worked at the unit level.

Benchmark. You want a positive first-order contribution margin after acquisition. If the first order loses money, every new customer makes your cash position worse, not better.

Read Finance & Unit Economics Term Gross Margin Term Customer Acquisition Cost Term New Customer Acquisition Cost Term Average Order Value
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