CMO: We achieved the revenue target by 110%!

Marketing Agency: And we got a 7 ROAS!

CFO: Yes, but profitability dropped 20%

I see this dynamic over and over again in 7 and 8-figure eCommerces.

And it always comes down to the same mistake—perhaps the most costly of all:

TEAMS ARE OPTIMIZING FOR THE WRONG METRIC.

If your team doesn’t have Marginal Contribution as their objective, you’re losing money somewhere.

Let me explain why…

The Problem with Using Revenue as Metric #1

Most eCommerces use revenue as their star metric to measure performance and growth.

But revenue is very far from what really matters: profit.

In the P&L, it’s literally the metric most distant from real earnings.

What’s the result of this blind obsession with revenue?

• We invest in advertising at a loss (well, we have to reach the target)
• We create promotions that destroy margins and damage the brand
• We send excessive emails/SMS that exhaust recurring customers’ patience
• We celebrate sales “records” while money deteriorates

Target achieved, profitability destroyed.

Numbers that look spectacular in presentations. The graph is exponential.

But if you look behind them, they hide a concerning financial reality.

The Solution: Marginal Contribution as North Star Metric

All of this would be solved if we prioritized Marginal Contribution over all other metrics.

Not buried in the P&L where nobody sees it, but at the top—visible to the entire team, all the time.

Let’s define Marginal Contribution (in eCommerce) to be on the same page:

NET REVENUE (Total Revenue – VAT – Returns) Important to subtract returns to avoid inflating revenue

–

DELIVERY COST (Product + Shipping + Payment Commission) That is, all variable costs necessary for the product to reach the customer.

–

ADVERTISING INVESTMENT (Performance + Brand, prorated by sales channel) If we have more sales channels like Amazon or Retail, prorate brand advertising so all its weight doesn’t fall on the online store

=

MARGINAL CONTRIBUTION

This money is what really remains to cover fixed expenses, invest in growth, and distribute dividends.

Why Marginal Contribution and Not Another Metric?

It fulfills two critical requirements that other metrics don’t:

Proximity to profitability: It’s the metric closest to real profit

Daily measurement: You can calculate it every day, unlike net profit which requires waiting for monthly close

Control: The marketing team has direct control over most of its components

How to Implement This Change

Marginal Contribution should be the first metric on your dashboard, and the one that defines all other variables of your business:

• How much to bill
• How much to invest in advertising
• Maximum acceptable CAC
• Timing of promotions

And the second key is in the forecast.

Always start with your Marginal Contribution objective and do reverse engineering to calculate how much you need to bill, how much you can invest in ads, and what margins are non-negotiable.

This approach completely inverts traditional logic.

Instead of chasing revenue at any cost, you first define how much profitability you need and work backwards.

As Peter Drucker said: “What gets measured gets managed.”

And when your team sees and pursues this metric every day, decisions automatically change:

→ Advertising investment only with demonstrated positive return

→ Extreme care with discounts that damage margins

→ Strategies focused on profitability, not short-term revenue

→ Inventory decisions based on real profitability

The result? Sustainable growth that truly generates value and protects the business’s future.

Want to implement this metrics system in your eCommerce but don’t know where to start?

Book a free 30-minute call.

I’ll help you identify where the leaks are in your P&L and how to prioritize Marginal Contribution to maximize profitability.