Free shipping threshold calculator.
Will free shipping from a new order value pay for the shipping it gives away? Enter your order value, margin and shipping costs to see how many more orders you need to break even. Calculated in your browser as you type.
Break-even
- Change in orders needed to break even
- +4.5%
- Orders from the same visitors, to keep profit per visitor where it is today.
- Profit per visitor, as you expect it
- −4.3%
- Costs you money
- Contribution per order
- 34.12
- 35.65 today
- Or: change in order value needed
- +4.1%
- With no change in orders, and 22% of orders shipping free.
Today every order pays 6.95 for shipping, so shoppers pay 6.95 of shipping per order on average and each order contributes 35.65 after product and shipping costs.
With free shipping from 75.00, 22% of orders ship free with baskets the same size: shoppers pay 5.42 of shipping per order and each order contributes 34.12.
To earn as much per visitor as today, you need 4.5% more orders from the same visitors.
With no change in orders, profit per visitor would fall by 4.3%.
How it's calculated
A break-even analysis on contribution per order: the margin an order earns plus the shipping the shopper pays, minus what shipping costs you. It is the break-even sales change used in pricing (Nagle and Müller, The Strategy and Tactics of Pricing), applied to a shipping offer.
c = AOV · m + f · (1 − q) − sbreak-even change in orders = c(today) / c(new) − 1The order value needed at your expected change in orders solves the same equation for AOV, with the share shipping free held at what you entered. The free shipping threshold guide works through an example with these formulas.
What it assumes
Questions
Where do I find the share of orders at or above a threshold?
Export a few recent weeks of orders from Shopify (Orders, then Export) and count the orders whose subtotal, before shipping, is at or above the amount.
Why doesn't it ask for my conversion rate?
The break-even is a ratio: the conversion rate appears on both sides and cancels out. You get the same percent change in orders whether your store converts at 1% or 4%.
What should I put in expected change in orders?
Your best guess, then try a pessimistic one. The break-even tells you what has to happen; only a test on your store tells you whether it does. If the break-even needs far more orders than any shipping change has given you before, the threshold is too generous.
Does it include payment fees and returns?
No. Payment fees scale with order value, so they shave a little off the margin: lower the margin by your fee rate to include them. Returns of items added just to reach the threshold are best measured in a test.
My shipping cost depends on weight and zone. Which number do I use?
Your average cost per order over the same weeks as the order export. Bigger baskets can cost more to ship, so if the new threshold should grow baskets, try a slightly higher cost too.
Then test it on your store.
The break-even says what has to happen. A shipping test shows whether it does. Book a demo, or start the free trial on Shopify.