--- title: "Free shipping threshold calculator" description: "Price a free-shipping threshold with the shipping you give away on orders that already reach it, and the share of smaller orders that must top up to pay for it." url: https://offersuite.io/calculators/free-shipping-threshold updated: 2026-10-13 --- # Free shipping threshold calculator The usual rule sets the threshold at your average order plus shipping cost divided by margin. It leaves out the orders that are already above the threshold: they stop paying for shipping and buy nothing more. This counts them, prices the top-ups from smaller orders, and tells you how many of those have to happen for the threshold to pay. ## Result 240 orders a month already reach the threshold, so it gives away **$1,680.00** of shipping a month. Even if every order below it topped up, that would earn $1,585.00: the threshold can't pay for itself. Of the thresholds below, **$75.00** is the lowest that can, once 2.4% of the orders under it top up. **Average order** $41.73 **The rule of thumb would say** $55.37 **Margin if every order below topped up** $1,585.00 Your orders against the threshold | Order value | Orders a month | Today | Margin if one tops up | | --- | --- | --- | --- | | $25.00 | 300 | Pays shipping | $6.75 | | $35.00 | 260 | Pays shipping | $1.25 | | $45.00 | 180 | Pays shipping | −$4.25 | | $55.00 | 120 | Already free | — | | $70.00 | 80 | Already free | — | | $100.00 | 40 | Already free | — | Other thresholds, same orders | Free shipping from | Shipping given away a month | Share of smaller orders that must top up | | --- | --- | --- | | $25.00 | $6,860.00 | never pays | | $35.00 | $4,760.00 | never pays | | $50.00 | $1,680.00 | 106.0%: can't pay | | $75.00 | $280.00 | 2.4% | | $100.00 | $280.00 | 1.1% | Given away a month $1,680.00. Top-ups needed can't pay ## Your numbers **The threshold** Free shipping from $50.00 Shipping charged below it today $7.00 Margin on product revenue 55% What an extra dollar of products keeps after its unit cost, picks and fees. Shipping label, per parcel $7.50 Used only for the rule of thumb. **Your orders by value, per month** Band 1: order value $25.00 Band 1: orders a month 300 Band 2: order value $35.00 Band 2: orders a month 260 Band 3: order value $45.00 Band 3: orders a month 180 Band 4: order value $55.00 Band 4: orders a month 120 Band 5: order value $70.00 Band 5: orders a month 80 Band 6: order value $100.00 Band 6: orders a month 40 [Reset to the example](https://offersuite.io/calculators/free-shipping-threshold) ## How it's calculated - Subsidy = orders already at or above the threshold × shipping they no longer pay - Gain from one order that tops up = (threshold − its value) × margin on product revenue − the shipping it no longer pays - Share that must top up = subsidy ÷ the gain if every order below the threshold topped up - Rule of thumb, for comparison = average order + shipping label ÷ margin Every figure on this page comes from Offer Suite's own margin engine, the same code the product uses to forecast each offer's and option's profit and to compute realized margin on orders. Money is computed in whole cents. ## Worked example A store charges $7.00 shipping and gets 980 orders a month averaging $41.73, with 55% margin on product revenue. The rule of thumb puts free shipping at $55.37. Try $50.00. 240 orders a month are already at $50.00 or more. They stop paying for shipping and buy nothing extra: $1,680.00 a month given away. A $25.00 order that tops up earns $6.75 more, but a $45.00 order that tops up earns −$4.25: the few dollars of products it adds keep less than the shipping it no longer pays. Even if every order below the threshold topped up, they would add $1,585.00, less than the subsidy. At $75.00, only 40 orders already qualify, so the threshold gives away $280.00 a month and pays once 2.4% of smaller orders top up. The best threshold is rarely the one the rule of thumb gives. ## Assumptions - An order that tops up adds exactly enough to reach the threshold. Real top-ups overshoot a little, which helps. - Orders below the threshold top up in proportion across the bands. Orders just below it are the likeliest to, and they gain the least. - The threshold does not change how many orders you get. If free shipping also wins new buyers, their margin comes on top. - The label cost does not change: you paid for shipping before and you still do. What changes is what the customer pays you for it. - The order bands are an example. Your order report, grouped by order value, gives yours. ## Questions ### How do I calculate a free shipping threshold? Start from your orders by value. Every order already above the threshold costs you the shipping it no longer pays. Every order below it that tops up earns the margin on the extra products, less the shipping it no longer pays. The threshold pays when enough smaller orders top up to cover the first cost. ### What is wrong with average order value plus shipping divided by margin? It sets a level but never asks what the threshold costs. Orders already above it are the cost, and it doesn't count them. With many large orders a threshold can lose money at any level of top-ups. ### What margin should I use? The contribution margin on product revenue: the share of an extra dollar of products left after unit cost, extra picks, card fees and refunds. The bundle and option calculators on this site work it out per order. ### What does it mean when topping up never pays? The orders below the threshold are so close to it that topping up adds less margin than the shipping they stop paying. Every top-up then loses money, so no share of them can cover the subsidy. Raise the threshold or keep charging shipping. ## Embed this calculator Paste this where you want the calculator. It opens on the numbers above, recalculates as your readers change them, and links back to this page. **Show the embed code** ``` ``` ## See what your own offers earn. Offer Suite opens to Shopify brands a few at a time. Join the waitlist, or ask for a free profit audit of your past orders: realized profit per item and per offer option, what each costs you, and where margin leaks. [Join the waitlist](https://offersuite.io/waitlist) [Request a free profit audit](https://offersuite.io/profit-audit) ## Related - [Calculators **Profit calculators for Shopify offers** Calculators for contribution margin per order, break-even discounts, average order value, shipping by weight and zone, card fees, Amazon and TikTok Shop fees, break-even ROAS and CPA, upsell funnels, gifts, subscriptions, bundles and free-shipping thresholds, each run on Offer Suite's margin engine.](https://offersuite.io/calculators) - [Feature **Forecast and realized profit per offer option** Forecast and realized profit per offer, option, version, item and traffic source from one margin engine in whole cents, with ad spend, realized CAC and subscription LTV.](https://offersuite.io/features/profit) - [Calculator **Offer option calculator: profit per visitor** Compare up to three offer options on profit per visitor, margin per order times conversion, and see the conversion lift each one needs to match the best.](https://offersuite.io/calculators/offer-option-profit-per-visitor) - [Calculator **Bundle pricing calculator: shipping, subscriptions** Price a bundle against a single unit, one-time and subscribed, with the shipping and pick costs it saves, and the conversion it can lose and still earn as much.](https://offersuite.io/calculators/bundle-pricing) - [Calculator **Gift with purchase profit calculator** What a free gift costs per order, after its unit cost, its extra pick and its handling, and how much conversion it has to add to pay for itself.](https://offersuite.io/calculators/gift-with-purchase-profit) - [Glossary **Average order value (AOV): definition and formula** Total order revenue divided by the number of orders. Useful for spotting a trend, misleading for setting thresholds because it hides the shape of your orders.](https://offersuite.io/glossary/average-order-value)