Free business tool

Free Shipping Threshold Calculator for Ecommerce

Find the order value needed to protect your selected contribution margin when shipping becomes free.

Inputs

Current average order valueProduct revenue per order, excluding shipping charged.$Product gross marginAfter product cost, before shipping and other variable fees.%Shipping cost to youAverage shipping subsidy if the order qualifies for free shipping.$Shipping currently chargedFor comparing current orders only; qualifying orders collect none.$Other fixed variable costs per orderFulfillment or payment fees not included in gross margin.$Target contribution marginDesired share of product revenue after the costs above.%Current free-shipping thresholdOptional comparison with the calculated floor.$

Results

Current AOV$85.00

Current contribution after shipping charged$40.75

If shipping were free at current AOV$34.75

Margin with free shipping at current AOV40.9%

Calculated threshold floor$60.00

Current threshold$100.00

Gap above current AOV$0.00

The floor solves: (product gross profit − shipping cost − other fixed variable costs) ÷ order value ≥ target margin. It assumes the same product margin at higher basket values and a fixed shipping cost. It does not predict conversion, basket growth, or how many orders qualify. Shipping charged on current orders disappears on qualifying free-shipping orders.

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