Contribution Margin Waterfall (CM1 → CM4)

A single-screen visualisation of how every dollar of revenue flows through COGS → variable costs → CAC → retention spend to arrive at CM4 (true per-order profit). It's the canonical D2C investor-deck chart because it shows the full unit economics on one slide.

CM4, but investors will scrutinise CM2 separately because it shows scalable margin independent of acquisition strategy. A common red flag: a brand with great CM1 (70%) but terrible CM4 (-5%) means CAC and retention costs are eating all the gross margin.

Rarely in D2C. Most brands have negative CM3 first-order (recovered via repeat purchase) and use cohort LTV-to-CAC ratios to justify the loss. Subscription brands often achieve positive first-order CM3 by month 2-3 when renewals kick in.

CM1 > 50%, CM2 > 35%, CM3 within 30% of break-even on first order, CM4 positive within 12 months of acquisition. Brands that scale profitably hit these benchmarks; brands that burn cash usually fail at CM2 (variable costs eat margin) or CM3 (CAC too high).