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Free shipping threshold calculator

A common rule of thumb puts the free shipping threshold 15-30% above your average order value, about one more item away, and only where the margin on that extra spend pays for the shipping.

Calculator

Shopify admin > Analytics.

What shipping costs you, on average.

(Price - product cost) ÷ price.

A product shoppers often add.

Leave empty to use the starting threshold.

Results

Suggested threshold range Rule of thumb

$92 to $104

15-30% above your average order of $80.00.

Starting threshold

$100

Your average order plus one typical item: $80.00 + $20.00.

Extra order value to cover shipping

$10.00

$6.00 shipping ÷ 60% margin. Below $90.00, an order that grows from your average can't pay for its own shipping.

Break-even at a $100 threshold

50%

At least this share of free-shipping orders must be orders that grew to the threshold. Each one adds $12.00 of margin, $6.00 after shipping. For every 10 orders that would have qualified anyway, you need 10 that grew.

At $100, an order that grows from your average pays for its own shipping, with $6.00 to spare.

Your numbers stay in your browser: nothing is sent or saved. The link keeps your inputs, so you can bookmark or share it.

How it works

The math, step by step

1. A range, as a rule of thumb. The idea is to set free shipping a little above your average order, so a typical shopper adds a bit more to reach it. 15-30% above your average order value is a common starting rule. It is a sensible band to test, not a statistic about other stores.

2. About one more item. Inside that band, the starting threshold is your average order plus one typical item: the point where a typical shopper adds one more thing. If one item is too small or too big for the band, the calculator uses the nearest end.

3. The margin check. Free shipping costs you the shipping on every order that gets it. An order that grows from your average to the threshold adds (threshold - AOV) × margin in profit. That has to be more than the shipping.

4. The break-even. Some orders were already above the threshold, so they get free shipping without growing. They only cost you. The break-even share is how many free-shipping orders must be grown orders for free shipping to pay for itself.

What it leaves out. It assumes shoppers pay about what shipping costs you today, and treats every grown order as starting at your average. It does not count new shoppers who buy because shipping is free. Test a threshold for a few weeks and compare with your own numbers.

Formulas

  1. Range = AOV × 1.15 to AOV × 1.30 (a rule of thumb, not a statistic)
  2. Starting threshold = AOV + typical item price, kept inside the range
  3. Extra order value to cover shipping = shipping cost ÷ gross margin
  4. Gain per grown order = (threshold - AOV) × gross margin - shipping cost
  5. Break-even share of free-shipping orders that must grow = shipping cost ÷ ((threshold - AOV) × gross margin)

Worked example

One store, start to finish

  1. The store

    Average order $80. Shipping costs $6 per order. Gross margin 60%. A typical item costs $20.

  2. Range

    $80 × 1.15 = $92 and $80 × 1.30 = $104, so the range is $92 to $104.

  3. Starting threshold

    $80 + $20 = $100. That sits inside the range, so the starting threshold is $100.

  4. Cover the shipping

    $6 ÷ 0.60 = $10. An order has to grow by $10, to $90, before its extra margin pays for its shipping.

  5. One grown order

    From $80 to $100 adds $20 × 0.60 = $12 of margin. After the $6 shipping, that is $6.

  6. Break-even

    $6 ÷ $12 = 50%. Half of the free-shipping orders must be orders that grew. Each grown order (+$6) pays for one order that would have qualified anyway (-$6).

Open this example in the calculator

Put the threshold to work

Show shoppers how close they are.

  • Cartify · Cart

    Cartify's reward bar shows how far a shopper is from free shipping, right in the cart drawer, and a higher tier can add a free gift by itself. The bar is a display: the free shipping rate itself is set in Shopify, with the same minimum.

    About Cartify Shopify App Store

FAQ

Free shipping threshold questions

What is a good free shipping threshold for a Shopify store?
There is no single right number. A common rule of thumb is 15-30% above your average order value, so a typical shopper needs about one more item to get there. Then check the margin: the extra spend has to earn more than the shipping you give away. The calculator does both steps with your own numbers.
Should the threshold be above or below my average order value?
Above. If it sits below your average order, most orders already qualify, so you pay for shipping on orders you would have had anyway and nobody has a reason to add more.
Where do I find my average order value in Shopify?
In Shopify admin, open Analytics. Average order value is one of the standard reports, and you can pick the date range. Use a normal period rather than a sale week.
What margin should I enter?
Your gross margin on products: (price - product cost) ÷ price, averaged across what you sell. Leave shipping out of it, because the calculator handles shipping on its own line.
What does the break-even share mean?
Once free shipping is on, two kinds of orders get it: orders that grew to reach the threshold, and orders that were already above it. Grown orders add margin, the others only cost you shipping. The break-even share is how many of the free-shipping orders must be grown orders for the two to cancel out. Below it, free shipping costs more than it brings in.
Does a free shipping bar give free shipping by itself?
Not in Cartify. Cartify's reward bar shows the goal and the progress in the cart. The free shipping itself is set in Shopify: a free shipping discount with a minimum purchase amount, or a free rate with a minimum order price in your shipping settings. Keep both amounts the same.

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