Margin and profit · P&L line 25
CM2
CM1 minus the cost of fulfilling the order and getting paid.
Formula
CM1 − logistics − payment fees
CM2 takes CM1 and subtracts logistics and payment fees: the shipping rate card, pick and pack, packaging and its EPR fee, return processing, and the provider's cut of the payment.
These costs scale with the number of orders rather than with revenue, which is why a store whose average order value is falling can grow revenue and lose CM2 at the same time.
If CM1 holds and CM2 falls, the problem is not your pricing. It is basket size, shipping zones, or returns. The diagnostic version of that reading is in CM1, CM2 and CM3 explained.
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