How to set a free shipping threshold

A free-shipping minimum is a trade. Orders above it stop paying for shipping, so you give up that revenue. In return, shoppers just below it add items to qualify, raising your average order value, and the offer can win orders you'd otherwise lose at checkout. The right threshold is where that trade pays you the most.

This calculator models the spread of your order values, works out which orders would qualify at every threshold from about your average order up to double it, and recommends the most profitable one, rounded to a clean number.

Worked example

A store has a $62 average order, 1,000 orders a month and a 55% gross margin. Shipping costs it $8.50 and customers pay $5.95. Assuming 30% of near-miss shoppers top up and free shipping wins 8% more orders, the calculator recommends a $75 minimum, about 21% above the average order. Roughly a third of orders would qualify. The store gives up about $1,950 a month in shipping revenue but gains more from extra sales and bigger baskets, for about $525 more gross profit a month. Change the numbers above to see the curve: profit usually rises as the threshold moves above the average order, then falls when it gets too far away for shoppers to bother.

Why free shipping matters

Surprise costs are one of the biggest reasons shoppers abandon checkout. In Baymard's 2024 survey of US adults, 48% of shoppers who abandoned a checkout said extra costs such as shipping, taxes and fees were the reason. A clear free-shipping offer removes one of those costs. But giving free shipping on every order can wipe out your margin, which is why a minimum spend is so common.

How to make your threshold work harder

• Show a progress bar in the cart: “You're $12 away from free shipping.”
• Recommend add-ons priced to close the gap, ideally low-cost, high-margin items such as accessories, refills or samples.
• Announce the offer everywhere: the announcement bar, product pages and the cart, not just at checkout.
• Add a second reward tier, such as a free gift at a higher spend, for shoppers already over the first threshold.
• Test it. Run the new threshold for at least two to four weeks and compare profit per visitor, not just average order value.

Frequently asked questions

Should my threshold be above my average order value?

Usually. Below your average, most customers already qualify without changing their behaviour, so you mostly give away shipping revenue. Modestly above it, shoppers have a reason to add one more item.

What if I already offer free shipping on every order?

Introducing a minimum can raise order values and cut shipping costs, but some shoppers below it may leave. Enter $0 as your current minimum to compare, and set the “extra orders” assumption to reflect what you might lose.

How accurate is this calculator?

It's a planning model. It estimates your order-value spread from your average and the variation you choose, and relies on behaviour assumptions you can change. Use it to pick a sensible starting threshold, then confirm with a live test.

Cart abandonment figure: Baymard Institute survey of US adults, February 2024, as reported by eMarketer. Calculator results are estimates based on your inputs and assumptions.