Free Shipping Threshold Calculator
Enter your average order value, gross margin and what shipping costs you on average. You get the break-even threshold, how much customers must add to reach it, and what a threshold of your choice earns or loses per qualifying order. Nothing is sent anywhere.
In one sentence: The break-even free-shipping threshold is the order value at which your gross margin exactly covers the shipping you give away.
Formula: break-even threshold = shipping cost ÷ gross margin; profit at a threshold = threshold × margin − shipping cost.
Why the threshold is a margin question
Free shipping is a cost you absorb in exchange for a bigger order. It only works if the extra margin on the bigger order covers the shipping. The break-even point is simply the shipping cost divided by your margin: at 40% margin and 8 of shipping, any order above 20 pays for its own delivery. Setting the threshold well above the break-even point, and above your current average order, is what turns it into a profit lever rather than a giveaway.
Picking the number
A common approach is to set the threshold somewhat above the average order value so that a meaningful share of customers add one more item to qualify. Too close to the average and most orders get free shipping with no change in behaviour; too far above and nobody bothers. Test with the optional field: enter a candidate threshold and the calculator shows the gross profit on a qualifying order after shipping and how far it sits above your average. Use the margin after platform and payment fees, which the profit per order calculator gives you.
Variations
If shipping costs differ widely by product weight or destination, run the calculation per zone with that zone's shipping cost. Some sellers add a small handling amount to prices when they introduce free shipping; the price increase calculator shows what rise keeps the margin intact.
Frequently asked questions
Should margin include the cost of goods only?
Use the contribution margin: after product cost, packaging, platform and payment fees. Fixed overheads do not change per order and belong elsewhere.
What if my average order is already above break-even?
Then free shipping on every order costs you less than it looks, and the threshold decision is about nudging order size rather than avoiding losses.
Is my data stored?
No. Everything runs in your browser.