Margin and profit · P&L line 19
CM1
Net revenue minus the cost of the goods you sold.
Formula
Net revenue − COGS
CM1 is the first contribution margin: what the merchandise itself earns, after VAT, discounts and returns are out and before anything is shipped or advertised.
It is the ceiling on everything below it. If CM1 is thin, no amount of marketing efficiency or shipping negotiation will save the month, because there was never enough margin to pay for winning the customer.
Read it per product rather than only in total: one heavily discounted line can pull the whole figure down while the rest of the catalogue is healthy. For how it sits against the two margins below it, see CM1, CM2 and CM3 explained.
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