CP (Contribution Profit)

On Amazon, Contribution Profit is commonly used in 1P Vendor operations to measure the financial performance of a product or group of products.

It is calculated as:

CP = (Average Selling Price – Cost of Goods Sold + Contra-COGS – Variable Costs)

Where:

• Cost of Goods Sold (COGS) is what the product costs Amazon to purchase from the vendor
• Contra-COGS includes vendor-funded terms like co-op, marketing contributions, etc.
• Variable Costs include shipping, handling, and fulfillment costs

CP is usually paired with Contribution Margin (CM), which is the percentage, while CP is the absolute value in dollars.

This metric is essential for:

• Evaluating the profitability of individual ASINs
• Deciding whether to continue or discontinue a product
• Assessing negotiation terms with vendors

💡 Example:
If Amazon sells a product for $50, pays $30 to the vendor, spends $5 on fulfillment, and receives $3 back in contra-COGS, the CP is:

$50 – $30 + $3 – $5 = $18 Contribution ProfitIn short:
CP (Contribution Profit) is the dollar profit Amazon makes from a product after all variable costs are deducted - a key metric for assessing product profitability.