CM1

CM - contribution margin, marginal profit. The number next to it indicates the level: how many layers of costs have already been subtracted from revenue.

CM1 - revenue minus the cost of goods or the direct cost of services. This is the purest measure of how much is left over from the sale before all other expenses.

CM2 - CM1 minus variable costs associated with execution: logistics, acquiring, packaging, site commissions. Here you can see how much the order actually brings after it is delivered to the client.

CM3 - CM2 minus acquisition costs, that is, marketing. This is the level at which marketing ceases to be a separate expense item and is integrated into the economics of sales. It is CM3 that is usually used to decide whether to scale a channel: a positive CM3 means that each additional sale brings in money, rather than eating it up.

The cascade is useful because it shows on which layer the profit is lost. Good CM1 and negative CM3 mean that the product is fine, but the problem is the cost of acquisition.