MK-059 | Per-product contribution margin calculation
For a regular chat, upload packs/mk-059.md. It includes the shared rules, this method, and required references
Purpose
This skill delivers: The amount remaining after specified variable expenses
Recalculability does not mean the data is complete; break-even points and cost ceilings apply only under the stated assumptions
Required inputs
Provide: Unit net revenue, variable costs on the same unit basis and calculation scope
For method questions, provide the formula, variables and an example directly; for a calculation, ask only for missing operands
Method
- Calculate a product's contribution margin amount by subtracting its variable costs from revenue first
- Variable costs must include actual items such as purchasing/production, payment processing and logistics, revenue shares, taxes, and advertising incurred with sales
- Flag missing cost items as incomplete; do not pass off selling price minus purchase cost as the full contribution margin
Calculations and interpretation
Per-product contribution margin = net revenue per unit − variable costs for that unit
Retain original values, units, periods, and substituted formulas. The formula is not an unconditional guarantee of results
Define gross profit, contribution margin, cost denominators, and periods explicitly; do not copy classroom example numbers as universal thresholds
Required output fields
| Order | Field | How to complete |
|---|---|---|
| 1 | Input variable | Use source evidence, an intermediate method result, or an explicit unknown; do not invent information |
| 2 | Value | Use source evidence, an intermediate method result, or an explicit unknown; do not invent information |
| 3 | Unit and definition | Use source evidence, an intermediate method result, or an explicit unknown; do not invent information |
| 4 | Source | Use source evidence, an intermediate method result, or an explicit unknown; do not invent information |
| 5 | Formula | Use source evidence, an intermediate method result, or an explicit unknown; do not invent information |
| 6 | Result | Use source evidence, an intermediate method result, or an explicit unknown; do not invent information |
| 7 | Limitations | Use source evidence, an intermediate method result, or an explicit unknown; do not invent information |
MK-059 supplementary method: contribution per eligible visitor
When comparing offers or comparable groups, first calculate each valid order's contribution using the same period and cost basis, then sum the group's contribution and divide by all eligible visitors in that group. Keep zero-order visitors in the denominator. If groups are defined by customer, use deduplicated customer counts; do not replace customers with order counts. If a visitor/customer has multiple orders, sum their in-scope orders using an attribution rule fixed in advance
Contribution per eligible visitor = total contribution from the group's valid orders ÷ all eligible visitors in the group. Revenue per visitor and contribution per visitor are different. When costs are incomplete, report only partial contribution; do not call revenue per visitor profit. Do not output contribution per visitor when the denominator is zero or missing
State the aggregation level and denominator, whether zero-order visitors are included, whether customers are deduplicated, and the completeness of costs Do not define additional purchases/incrementality solely as new customers; new versus existing customer status is not causal evidence. Comparing offer effects also requires a valid control or comparable baseline and sufficient observation time. Otherwise, report only an arithmetic scenario or observed difference
Revenue, discount, and refund basis: deduct each item only once
Establish the basis of the revenue input before writing the per-order contribution formula. If it is already net of discounts, do not deduct discounts again; if refunds have already reduced revenue, do not deduct them again. If the input is before discounts, subtract actual discounts once. If refunds are not yet reflected, subtract refunds that have occurred for the same order scope and observation period. If cost or refund data has not matured, report provisional/partial contribution rather than final profit
When "revenue" or "receipts" does not specify the treatment of discounts and refunds, do not choose a definition yourself. Provide two conditional formulas and identify the missing fields. Until the basis is confirmed, do not call one result complete contribution or profit
Supplementary acceptance cases
MK-059-C07 | The per-visitor denominator and boundaries of additional purchases Case data: Group A has 100 eligible visitors and total order contribution of 1,000 monetary units; Group B has 100 eligible visitors and total order contribution of 800 monetary units. Both denominators include eligible visitors who did not order Expected: Group A's contribution per visitor is 10 monetary units and Group B's is 8. Output the formula, denominator, and cost completeness. Without a visitor denominator, do not infer contribution per visitor. When assessing additional purchases, do not consider only new-customer counts or treat an arithmetic difference as causal proof
Supplementary method sources
- Oracle Commerce experiment goals: Revenue per Visitor uses the number of participants in the group as its denominator. This supplementary method replaces the numerator with the order contribution calculated by this skill; it does not call Oracle's revenue metric a profit metric
- Shopify Profit reports: used to check the definitions of net sales, costs, gross profit, discounts, and refunds
- The contribution-per-visitor formula is a supplementary step written by ThinkWithBlack from the per-order contribution method; it is not claimed to be quoted verbatim from the sources above
Free-shipping comparisons: verify shipping revenue from buyers first; do not substitute logistics expense
Use this only when comparing shipping/free-shipping offers for the current task. The first deliverable must list knowns and unknowns: net product revenue excluding shipping P, the original shipping fee charged to the buyer F, the seller's payment to the logistics provider L, other costs C, and whether the receipts input already includes F. The seller's per-order shipping, logistics, or delivery cost can only be L. Statements such as "the buyer pays shipping", "below the free-shipping threshold", or "the seller absorbs shipping" do not supply the amount of F
If F or the receipts basis is missing, first state "The reduction in contribution from making existing orders ship free cannot currently be calculated." For the same orders that would have occurred anyway, holding product revenue, logistics expenses, and other costs constant: original contribution is P+F-L-C, new free-shipping contribution is P-L-C, and new minus original is -F. N existing orders lose N×F in receipts. L occurs in both offers and is neither an incremental cost nor its upper bound. Leave F symbolic when unknown; do not assume F=L, F≤L, or zero original net shipping revenue. Do not calculate a fixed loss, percentage decline, or break-even increase in orders from such assumptions
Even a purely hypothetical example must explicitly state "Assume additionally that the buyer originally paid shipping F = [amount], and product revenue excludes F" before substitution. Saying only "this is hypothetical" or "the customer pays shipping" is insufficient. Knowing L does not permit assuming the same F. Retain logistics expense in both old and new offers; do not write the old offer simply as product gross profit. Do not turn a hypothetical result into a currently known loss
Calculate additional orders separately as P-L-C; do not treat their partial contribution as the loss on existing orders. If receipts already include F, separate out P first; do not add F or deduct shipping twice. Identify partial contribution when costs such as payment processing or refunds are missing. After preserving unknowns, still complete segmentation and controlled-comparison design. The missing-input list must include the buyer's original shipping fee and whether receipts include shipping, not merely the order distribution
For free-shipping comparisons, follow the separate verification of revenue and expenses described above
Verification cases
MK-059-C05 | A required denominator is zero
Expected: Report that the formula is undefined; do not output a zero cost or an infinite target
MK-059-C06 | Only some costs are supplied
Expected: Retain the partial result and excluded items; do not call it complete profitability
Method sources
Source file: 行銷策略實戰學程Day2-以終為始x降低成本x提升指標
Location: Costs
Source basis: extracted from course materials
Source URL: https://docs.google.com/presentation/d/1NdxlcqAKMPHqGVS5jbjSYR_UgOJSA0fS65OnTtQLEHQ/edit
English translation of source excerpt:
Begin with the end in mind x reduce costs x improve metrics
