Why do my orders look profitable but still don't make money?

Contribution margin excludes fixed and semi-variable costs — warehouse staff technology and returns handling — that are real per-order costs but sit below the variable cost line creating a 19pp gap between contribution and net profit.

The distortion lives in the accounting convention placing fixed costs below the contribution margin line — warehouse people and technology costs are excluded from the per-order profitability calculation leaving them invisible until the full P&L is reviewed.

Fixed costs of seventy-two thousand dollars per month divided across six thousand orders produce a fourteen-dollar fixed cost allocation per order that consumes nineteen percentage points of the twenty-two percent contribution margin leaving three percent net profit.

At three percent net profit per order four hundred and fifty-five thousand annual orders are required to generate one million dollars of profit — six times current volume — while a five percentage point margin improvement to eight percent reduces that requirement to one hundred and seventy thousand orders.