More ad spend, more discounts, more SKUs, more complexity. Your revenue is up 50% but profit is flat. NetNet helps you spot margin compression before it's too late.
For DTC brands growing revenue while contribution margin quietly compresses underneath it.
Margins don't snap on growth. They drift down. The first month you double ad spend, the per-order math still looks fine. The second month, AOV slips because the discount code is doing the work. The third month, a new shipping zone comes in expensive and nobody flags it. By the time you notice in the quarterly review, the trend is six months old. NetNet's job at scale is to flag the drift while it's still a month old.
You scale from $5K/mo to $30K/mo in ad spend. More volume, but same POAS — that's margin compression.
You attract smaller orders with discounts to hit growth targets. Each order has lower gross profit.
Influencer codes, seasonal promotions, loyalty programs. By month 12, you're running 15 concurrent discounts that each erode 2-3 points of margin.
More countries, more weight, more fulfillment. You lock in $5 flat shipping but costs are now $6 average.
You're still buying at volume tier 1 when you could negotiate tier 2. Old SKUs drag on margin. No one's measuring margin by product.
Gross profit minus ad spend per order. This is what actually contributes to fixed costs. Below 15%, you're scaling at a loss.
Every $1 spent on ads should return $1.50+ in contribution margin. Below 1.5x on your biggest channels means you're burning cash to scale.
New customer acquisition costs kill margins. If repeat rate is low, scaling means acquiring more customers at higher CAC. At 20%+ RPR, unit economics improve.
NetNet's AI compares this month's margin vs. last month's. A 2-point drop gets flagged so you investigate before it spreads to all channels.
Set your minimum contribution margin. When campaigns dip below it, NetNet alerts you. Pause before scaling further.
See every SKU's contribution margin. Double down on winners (high margin per order), kill losers that scale margin compression.
Meta and Google — each channel's actual POAS, not blended. Scale only the campaigns where POAS stays above 1.5x as you increase spend.
Every product has COGS configured
Gateway fees set per provider (Stripe, PayPal, custom)
Per-country shipping rules optimized
Ad accounts connected (Meta and Google)
Margin alerts configured at your thresholds
Scaling does not simply multiply a working business. It changes the mix of what is being sold and who is buying it, and both changes usually run against margin.
Acquisition costs rise because the cheapest audience is bought first. Discounting deepens because the incremental customer is more price-sensitive than the early one. The product mix shifts toward whatever the ads convert best, which is not necessarily what earns best. And costs that were rounding errors at low volume — payment fees, packaging, return handling — become material line items.
None of that is a failure of execution. It is what growth does, and it is manageable if it is visible. The stores that get hurt are the ones watching revenue while all four move at once.
Contribution margin rate, as a rate. The currency total rises with volume and reassures when it should not; the rate is what tells you whether each additional order is as good as the last one. A two-point slide across a doubling in volume is a large amount of money and is easy to miss entirely.
The gap between contribution margin per order and acquisition cost. One figure, in currency. Positive means growth funds itself. Negative means every additional order makes the position worse, and volume accelerates the damage rather than fixing it.
Watch both weekly rather than monthly while spend is rising. Monthly reporting on a business changing this fast tells you what happened after the period in which you could have acted.