Free shipping threshold calculator
Set free shipping where the extra order value pays for the shipping you absorb. See the threshold your margin supports and test any threshold against it.
Example numbers. Replace them with yours.
- Suggested threshold
- USD 75
- New average order value
- USD 61
- Shipping you absorb
- USD 2,100
- Extra gross profit
- USD 2,700
- Net change per month
- USD 600
What it calculates
Free shipping above a threshold works when customers add enough to their basket that the extra margin covers the shipping you now pay. The suggested threshold is your AOV plus the extra order value needed to pay for one shipment. Testing a threshold shows the new AOV, the shipping you absorb and the net effect, based on the share of orders you expect to reach it.
How to read the result
A threshold far above your AOV reaches few orders. A threshold close to it gives away shipping on orders that would have happened anyway. The share reaching it is the number to test. Look at how many current orders already sit just under the threshold.
Learn the metric:AOVGross margin
The formula
Suggested threshold = AOV + shipping ÷ margin (rounded up to 5) AOV lift = (Threshold − AOV) × share reaching it Shipping absorbed = Orders × share × shipping Extra profit = Orders × AOV lift × margin Net = Extra profit − shipping absorbed
Worked example
Example inputs
- Current AOV
- USD 55
- Shipping cost per order
- USD 7
- Margin
- 45%
- Orders per month
- 1,000
- Threshold to test
- USD 75
- Orders that will reach it
- 30%
Results
- Suggested threshold
- USD 75
- New average order value
- USD 61
- Shipping you absorb
- USD 2,100
- Extra gross profit
- USD 2,700
- Net change per month
- USD 600
What changes the result
Orders that will reach it at five values. Every other input stays as in the worked example; the highlighted row is the example.
| Orders that will reach it | New average order value | Net change per month |
|---|---|---|
| 15% | USD 58 | USD 300 |
| 22.5% | USD 59.50 | USD 450 |
| 30% | USD 61 | USD 600 |
| 37.5% | USD 62.50 | USD 750 |
| 45% | USD 64 | USD 900 |
Use your real numbers
Analify reads order values from Shopify and shipping costs from connected couriers, and shows the shipping you charge against what you pay.
Analify already reads 5 of these 6 inputs live, from Shopify · Courier
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Questions
How do I set a free shipping threshold?
Start at AOV + shipping cost ÷ margin. Below that, the extra basket does not pay for the shipping.
Does free shipping increase AOV?
It can, if enough customers add items to reach the threshold. Track the share of orders just above the threshold before and after.
Should the threshold be above my average order value?
Yes. Free shipping below your AOV gives it away on orders that would have happened anyway.
Do you store what I enter?
No. The calculation runs in your browser and nothing is sent to Analify.
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