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Free Shipping Threshold Calculator

Find the order value at which offering free shipping keeps your profit per order, from your average order value, margin and shipping cost.

  • Free
  • No sign-up to try
  • Works as you type

Free shipping threshold

Gross profit per order now

$24.00

Free shipping threshold

$62.00

Extra basket value needed

$14.00

Profit per order if you ship free with no change in basket

$17.00

  • Profit per order now = average order value × gross margin.
  • Extra basket needed = shipping cost ÷ gross margin (the extra sales whose margin covers the shipping).
  • Threshold = average order value + extra basket needed.

Free, no sign-up to try. Save it as a live calculator you can share; an estimate from the numbers you enter, not financial advice. Check the result against your own records before you rely on it.

See a worked example

How it works

How the Free Shipping Threshold Calculator works

  1. 1

    Enter your numbers

    Every result updates as you type, with the formula shown under it.

  2. 2

    Check the method

    See how each number is worked out and what it assumes.

  3. 3

    Save it as a Room

    Share a live calculator: others can change the numbers and see the result update.

Worked example

What it makes

Example inputs

Average order value now
$48
Gross margin on products
50 %
Shipping cost per order
$7

Results

Gross profit per order now
$24.00
Free shipping threshold
$62.00
Extra basket value needed
$14.00
Profit per order if you ship free with no change in basket
$17.00

How it's calculated

  • Profit per order now = average order value × gross margin.
  • Extra basket needed = shipping cost ÷ gross margin (the extra sales whose margin covers the shipping).
  • Threshold = average order value + extra basket needed.
  • Assumes: Today customers pay for shipping; with free shipping you pay it on qualifying orders.
  • Assumes: Extra items carry the same margin as the rest of the basket.
  • Assumes: More orders from free shipping are a bonus not counted here.

An estimate from the numbers you enter, not financial advice. Check the result against your own records before you rely on it.

Who it's for

Who uses it

  • Store owners

    Set a free shipping threshold from your own numbers.

  • Ecommerce managers

    Check an existing threshold still pays for itself.

  • Marketers

    Test a lower threshold before a campaign.

Good to know

What to consider

  • Extra items are assumed to carry the same margin as the rest of the basket.
  • Extra orders that free shipping brings in are not counted, so this is cautious.

Questions

About the Free Shipping Threshold Calculator

How is the threshold worked out?

Extra basket needed = shipping cost ÷ gross margin: the extra sales whose margin pays for the shipping. Add that to your current average order value.

Can I share the calculator with my team or a client?

Yes. The Room keeps the calculator live: anyone with the link can change the numbers and see the result update, with the method and assumptions on the same page.

Make your calculator now

Free, no sign-up to try. It becomes a Room you can edit, publish and share.

Create my calculator

Related

Related tools

  • Average Order Value CalculatorWork out your average order value from revenue and orders, and what a small increase in it would add at the same number of orders.
  • Ecommerce Profit CalculatorSee what you really keep from each order after product cost, shipping, payment fees and ad spend.
  • Markup vs Margin CalculatorSee markup and margin for the same cost and price side by side, and the price you need to charge to hit a target margin.
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