Glossary

What is Contribution Margin?

Last updated: July 7, 2026

Contribution margin is an item's selling price minus its plate cost — the dollars each sale contributes toward fixed costs and profit. Restaurants bank margin dollars, not percentages: a 60%-margin item earning $4 contributes less than a 45%-margin item earning $7.

Contribution Margin example with real numbers

A $24 entrée with a $8.60 plate cost contributes $15.40; a $13 appetizer costing $3.10 contributes $9.90. Volume decides which matters more.

How multi-unit restaurant groups manage contribution margin

Vento keeps plate costs synced to invoice prices so contribution margins reflect what ingredients cost this week.