Free shipping threshold calculator
Choose a shipping threshold that leaves adequate contribution.
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Your results
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How it works
Estimate the minimum merchandise order value that funds free shipping while preserving a chosen contribution amount. Compare that floor with your existing average basket and nearby basket sizes. Use revenue after discounts and a consistent merchandise margin. Shopify supports a minimum order amount for free shipping; its official setup guide is https://help.shopify.com/en/manual/fulfillment/setup/shipping-rates/setting-up-shipping-rates.
A few things to know
Assumes margin and per-order shipping/fulfillment costs stay constant across basket sizes. Excludes payment fees, returns, taxes, advertising, and overhead unless already reflected in the inputs. Larger, heavier, international, and split orders may cost more. Averages can conceal loss-making orders. Validate costs and eligibility by destination and product mix. The 0.01 rounding convention may need adjustment for your currency. No currency conversion, demand uplift, or conversion improvement is promised.
Results use your inputs. Keep all money amounts in the same currency.
When to use this tool
Free shipping moves the delivery bill from the customer to your order economics. This calculator estimates the minimum merchandise basket that covers the shipping and fixed fulfillment costs you enter while retaining a chosen contribution amount. It also compares the floor with your current average basket and nearby basket sizes. The result is an economic starting point for an offer; it does not identify the threshold that customers will prefer or promise that they will add more products.
- Estimate a cost-supported minimum order amount before setting up a free-shipping offer.
- Check whether the current average basket leaves enough contribution when you absorb delivery.
- Run separate calculations for shipping zones or product groups with different delivery costs and margins.
How to use free shipping threshold calculator
Set the merchandise margin
Enter Gross merchandise margin (%) after product costs and discounts. Use margin as a share of merchandise revenue, not markup on cost.
Add order costs and retained contribution
Fill Average shipping cost per order, Fixed fulfillment cost per order and Desired contribution per order in the same currency.
Compare basket scenarios
Optionally enter Current average basket value. Read the minimum threshold, its contribution and the scenario table before choosing your actual offer.
Covering delivery while keeping 15 per order
Inputs
Gross merchandise margin 40%; shipping 8; fulfillment 2; desired contribution 15; average basket 50.
Result
The minimum threshold is 62.50. Shipping and fulfillment total 10.00. At that threshold, contribution is 15.00. The average basket needs an additional 12.50 to reach the threshold.
What it means
A 50 basket produces 20 of merchandise margin, leaving 10 after delivery and fulfillment. A 62.50 basket produces 25, leaving the desired 15. This assumes added items carry the same margin and shipping cost.
Common mistakes to avoid
Using one delivery average for every order
Heavy items, international destinations and split shipments can cost much more. Test important exceptions independently.
Counting shipping twice
Keep merchandise margin separate from the shipping and fulfillment amounts entered below it.
Equating an average with a guarantee
A profitable average basket can conceal orders with low-margin products or expensive destinations. Check the distribution of actual orders.
Frequently asked questions
Definitions, edge cases, and practical next steps for this tool. Search all tool FAQs ↗
What formula determines the free-shipping threshold?
Shipping plus fixed fulfillment plus desired contribution is divided by the merchandise margin fraction. With a 40% margin, each 1 of merchandise revenue supplies 0.40 toward those amounts. The displayed threshold is rounded upward to a 0.01 increment.
Is this an optimal marketing threshold?
No. It is the minimum modeled basket for the chosen economics. Customer response, competitor offers and conversion changes are not inputs. You can use the floor to design an experiment, then evaluate actual order contribution and conversion.
What should the merchandise margin include?
It should reflect selling revenue after discounts less merchandise cost, divided by that revenue. Do not use a markup percentage. Keep taxes passed through out of the revenue basis and avoid including shipping again if you enter it separately.
Can I use different thresholds for different countries?
Run the calculator separately with each relevant shipping cost and margin assumption. The tool models one set of costs at a time and does not automatically configure shipping zones or determine eligibility in your store.
Why must the margin be above zero?
With no merchandise margin, additional basket revenue contributes nothing toward shipping or a positive retained amount. Dividing by a zero margin cannot produce a useful threshold, so the tool asks for a positive percentage.
Does the average-basket gap predict an AOV increase?
No. It is simply the difference between the entered average basket and the calculated threshold, with a minimum of zero. Customers may add items, pay shipping or abandon their carts; the calculation does not predict which response occurs.
Are payment fees and returns included?
There are no separate fields for them. Account for omitted costs consistently in your assumptions or evaluate the order separately using contribution and return-cost tools. Do not assume the displayed contribution is net profit after all business expenses.
What should I do with a threshold like 62.50?
Compare it with your intended customer-facing cutoff, such as a higher round amount, then check that amount’s economics. Also confirm the currency’s pricing increments and actual store rules for discounts, taxes, eligible products and destinations before launching.
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Sources and method
Use the references below to check definitions and platform guidance. The model’s scope and limits are explained above. Read our editorial standards.