Free shipping threshold
The order value above which shipping is free, set to grow baskets and orders while paying for the shipping it gives away.
Also called free shipping minimum
Shoppers just below the threshold often add an item to reach it, and some who wouldn't have bought do. Every order at or above it stops paying for shipping, including orders that would have been placed anyway.
Whether a threshold pays depends on how many orders it adds and how much bigger baskets get, against the shipping it gives away.
A store with $62 baskets, a 60% margin and $8.50 shipping costs charges $6.95 and tries free shipping from $75, which 22% of orders already reach. With baskets unchanged it needs about 4.5% more orders to earn as much per visitor.
Related terms
- Shipping testA test of shipping offers, such as the free-shipping threshold, where each group of shoppers gets its own shipping price at checkout.
- Profit per visitorGross profit from orders divided by visitors: revenue minus product costs and other variable costs, per visitor in a variant.
- Average order value (AOV)Revenue divided by the number of orders: how much a typical order is worth.