Free shipping threshold calculator
Test a free shipping threshold against your real order values. See the shipping subsidy, the contribution left after shipping and the smallest threshold that still pays for shipping.
Up to 400 order lines and 100,000 characters. Order values up to 1,000,000,000 and up to 1,000,000,000 orders per line. Shipping cost, shipping fee and target contribution up to 1,000,000, and gross margin from 0 to 100 percent. Calculated on your device. Download a JSON report and CSV files. One order value per line, with an optional number of orders at that value. Write numbers without thousands separators. Up to 100,000 characters. Review the settings before running.
Your result
How to use Free shipping threshold calculator
- Paste your order values, one per line, with the number of orders at each value if you have it.
- Enter the threshold, your gross margin, your shipping cost per order and the fee customers pay below the threshold.
- Enter the contribution you want from a free-shipping order.
- Calculate, review the subsidy and suggested threshold, then download the report.
Useful next steps
Contribution after shipping
For each line of orders, gross profit is the order value times your gross margin. Orders below the threshold pay your shipping fee, and orders at or above it ship free. Contribution after shipping is gross profit plus fees collected minus your shipping costs, and the shipping subsidy is your shipping costs minus the fees collected. In the example, 1,140 orders produce 28,252.98 of gross profit, 5,295.50 of fees and 9,576.00 of shipping costs, a subsidy of 4,280.50.
Break-even basket and suggested threshold
A free-shipping order pays for its own shipping when its value times the gross margin is at least the shipping cost, so the break-even basket is the shipping cost divided by the margin. This is the break-even analysis in Marketing Metrics by Farris, Bendle, Pfeifer and Reibstein (2nd edition, Pearson, 2010), applied to one order: 8.40 divided by 42% is 20.00. The suggested threshold adds the contribution you want before dividing: 18.40 divided by 42% is 43.81 after rounding up.
What it does not predict
The calculator uses the order values you paste as they are. It does not predict how many customers add items to reach the threshold, or how many orders you lose when shipping is not free. To test a change, edit the threshold and compare contribution after shipping, or paste order values from a period with a different threshold. The average gap below the threshold shows how far paying orders are from free shipping.