He was scaling at –$1/order. The DTC founder didn’t know what Contribution Profit was.

A wearable DTC founder I was advising could tell you his Meta ROAS to two decimals: 1.57. But every Shopify order was losing money...and he had no idea.

I asked how he was measuring performance.

“Just looking at Facebook,” he said.

This usually means decisions are based on channel data versus profit. A dangerous pattern I've seen across 100+ brands.

He was buried in Facebook Ads Manager. Weeding through ROAS, CPA, CTRs and figuring out what the hell was going on.

I call this Metric Minutiae, because it’s putting the cart before the horse.

The issue is Facebook ROAS often drifts from what’s actually happening in the business.

Meta undercounts purchases and can lead to misleading decisions

It’s like a customer walks in from a billboard and the cashier gets credit. I’ve seen this from $2M brands to $1B enterprise brands. Still wild to me.

Letting him keep running off partial data felt negligent.

So I introduced him to Contribution Profit.

It's what’s left after subtracting variable customer expenses from order revenue (COGS, merchant fees, fulfillment, and ad spend).

What’s left “contributes” to overhead and profit. It maps straight to your P&L. That’s why Contribution Profit ranks at the top of our Signal Stack, our framework for prioritizing metrics.

Here’s the napkin math we did:

‣ Average Order Value (AOV) = $86

‣ Variable Customer Expenses (VCE) = $40

‣ Customer Acquisition Cost (CAC) = $47

$86 AOV – $40 VCE – $47 CAC = –$1 Contribution Profit (CP)

Every Meta order was losing $1. As acquisition gets harder, his losses would compound.

Here’s how we'd start fixing it:

(1) Find breakeven ROAS per offer

Formula: AOV ÷ (AOV – VCE) → $86 ÷ ($86 – $40) = 1.87

That’s your floor. Below = loss. Ideally, your first order clears it otherwise you may need capital to cover overhead and inventory.

(2) Compare it to your actual ROAS

Check:

‣ Blended ROAS (total rev ÷ ad spend)

‣ New Customer ROAS (new customer rev ÷ ad spend)

‣ Meta ROAS

If Meta is under breakeven but blended or new customer ROAS is above, you might be in better shape. Meta’s likely underreporting, especially if Meta’s your biggest acquisition channel. If you're below, it's a sign to recalibrate: adjust bids, ads, offers, landing pages.

(3) Use a real dashboard to show real-time Contribution Profit

Triple Whale’s free version syncs Meta, Shopify, Amazon, Google, Klaviyo, and expense data. Use Net Profit as a proxy or upgrade to track CP directly.

Meta ROAS still matters as a tertiary metric but for business health, Contribution Profit is True North. At the end of the day, it's just asking “Are we losing money or making money from marketing?”.

As far as the founder, a few weeks later he DMed me saying:

"As you pointed out, there were a lot of sales Meta wasn't picking up...[and tracking Contribution Profit gave] a much clearer picture"

"It’s been my best week by far...really appreciate your guidance. It's made a real difference already!"