Contribution Margin

Contribution Margin is the marginal additional contribution a company gets from selling it's "n plus 1-th ware." That is, a paper company sells a ream of paper, for you tree-haters out there, for your computer printer. That ream wholesales for $2 and it costs the company $1.80 to produce. The contribution to profits is 20 cents, and that contribution margin is 20 over 200 cents, or 10%. Paper is a low contribution margin business. 

Duh. Serves you right.