Startup Margins

Contribution Margin in Ecommerce: What ROAS Does Not Show Ecommerce contribution margin is one of the most important numbers that ROAS does not show. Most operators running paid traffic know their ROAS by heart. They check it daily, optimize around it, and use it to decide whether a campaign is working. That habit is reasonable. ROAS is a useful signal. But it is incomplete in a way that can quietly damage a business if the gap is never addressed. A store can run at 3x or 4x ROAS and still generate almost no usable profit. Payment fees, platform costs, refunds, chargebacks, and the actual cost of goods all come out of that revenue figure before anything reaches the bottom line. ROAS does not capture any of that. Contribution margin does. Quick Answer Contribution margin shows how much money is left from each order after direct costs, payment fees, refunds, and ad spend. ROAS only compares revenue to advertising spend. That means ROAS can look strong while contribution margin remains to...

 What every online business beginner gets wrong about the most shared metric in ecommerce Every week, thousands of people post the same kind of screenshot in ecommerce Facebook groups, Reddit threads, and ecommerce Discord servers. A cropped ad dashboard. A big green number. A ROAS of 5x, 8x, sometimes absurdly higher. The caption is usually something like "week 3 of my store" or "finally cracked it." These screenshots spread fast. They get saved, shared, and used as benchmarks. Beginners look at them and think: that is what success looks like. That is the number I need to hit. Here is the uncomfortable truth: most of those screenshots, even the completely real ones, do not tell you whether the person posting them is actually making money. ROAS - Return on Ad Spend - is the single most shared metric in the ecommerce and ecommerce world. It is also one of the most misunderstood. Understanding what it actually measures - and more importantly, what it completely ign...