Contribution margin calculation

Contribution margin or profit, profit, profit

Contribution margin

The contribution margin calculation is just as important for the mail order house as the customer himself – only a profitable sale is a good sale. We have not only set up contribution margin calculations as their own function to be used as needed, but have also incorporated them as a fixed function for every customer, every advertising campaign/pricelist and every article. This makes the most important issue for a mail order company, its profitability, viewable everywhere without delay.

Your benefits:

  • You know in realtime which customers are profitable for you and which are not. You can find out the "investment worthiness” of a customer or an article and can focus your marketing efforts on customers and articles that are sure to bring profits. You will no longer waste time and money on unprofitable customers and products.
  • You know just which advertising campaigns/pricelists have brought which degree of success, broken down by every single advertising stage/customer category. Now you can repeat successful concepts and strike the unsuccessful ones from your advertising plan, or change them.
  • You can obtain important market research information about articles that are successful (profitable) or which lead to subsequent purchases. In addition, you can discover tendencies within target groups (which customer groups bring a profit) as well as which advertising methods are the most profitable.

»(Addressed to businesses) You owe the community profits so you can pay it taxes.«
Gerd Bucerius (1906-95), German publisher, "Die Zeit” newspaper

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