Ask three people in your company what your contribution margin is.
You'll get three numbers.
All three people will be right.
Three honest answers, twenty-one points apart
Marketing says 62%. That's revenue less product cost, which is what the ROAS targets were built on the year the ad account was set up.
Ops says 49%. They also take out pick and pack, packaging, and outbound shipping, because those are the costs they manage every day.
Finance says 41%. They take out everything ops did, plus returns, payment processing, and the discounts that never show up in the list price.
Nobody is padding anything. Each of them is measuring the part of the business they can see.
The same customer makes money and loses it
Take a $72 first order from a customer who cost $38 to acquire.
On marketing's number, that order throws off $44.64 of contribution. The customer is profitable on order one by $6.64.
On ops' number, it's $35.28. Down $2.72.
On finance's number, it's $29.52. Down $8.48.
Same customer. Same order. Same day. Profitable, slightly underwater, or clearly underwater, depending on who opened the spreadsheet.
Every decision uses whichever number the decider holds
That's the actual problem. Not that three numbers exist. It's that each one is quietly running decisions in its own function.
Marketing scales spend on a customer it believes pays back on the first order. Ops sets the free-shipping threshold off its number. Finance builds next year's plan off its own, then spends the year trying to explain why it doesn't add up.
Three reasonable teams, each optimizing correctly against a definition the other two never agreed to.
One definition, written down, with one owner
Pick the line. It should be finance's, because it's the only one that includes everything that actually leaves the business on an order.
Write it down. What's in, what's out, and where each input comes from.
Give it one owner, and make every target that uses the word "margin" point back to that definition.
That's an afternoon. It's also the meeting most brands have never had.
Margin clarity isn't a finance project.
It's an agreement about what one word means. Until it exists, every team is right and the P&L still doesn't add up.
CALL TO ACTION
If three people in your company would give you three different margins, that's the twenty minutes.
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