Shopify Free Shipping Threshold Calculator
Find the optimal free shipping threshold that boosts conversion without destroying your margin. Model the profit impact before you set it live.
By Marginory team · Online sellers with hands-on experience across Etsy, Shopify & POD
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Typical: 10–25%
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Without free shipping
Monthly orders50
Monthly revenue$2250.00
Monthly profit (at margin)$900.00
With free shipping (threshold = AOV)
New conversion rate2.88%
Monthly orders58
Monthly revenue$2587.50
Shipping subsidy cost-$402.50
Monthly profit$632.50
Profit change$-267.50
Threshold recommendation
Orders over threshold = AOV$45.00
Suggested threshold (130% of AOV)ⓘ$58.50
How this is calculated
Monthly profit (no free ship) = Orders × AOV × Margin%
Monthly profit (free ship) = Orders × AOV × Margin% − Orders × Avg shipping cost
Optimal threshold ≈ AOV × 1.25–1.35 (encourages add-to-cart without subsidizing all orders)
Assumptions:
- Conversion lift estimate is user-provided — actual lift varies significantly by niche
- All orders above threshold get free shipping (worst-case subsidy scenario)
- Shopify transaction/payment fees not included in this comparison (apply equally to both)
Source: https://www.shopify.com/blog/free-shipping · Last verified: 2025-06-01
Frequently Asked Questions
What free shipping threshold should I set on Shopify?
A common rule of thumb: set the free shipping threshold at 130% of your current average order value (AOV). If your AOV is $40, set the threshold at $52. This incentivizes order upsizing while ensuring most customers who add an item to qualify improve your margin.
Does free shipping increase Shopify conversions?
Free shipping is one of the highest-impact conversion levers in e-commerce. Studies show 65–80% of cart abandonment is due to unexpected shipping costs. Even a conditional free shipping offer (above a threshold) can lift conversion rates 10–30%.
How do I offer free shipping profitably on Shopify?
Option 1: Roll shipping cost into product price (simplest). Option 2: Set a threshold so the additional item margin from qualifying orders exceeds the shipping subsidy. Calculate: if average shipping cost is $6 and average margin per product is $12, you need customers to add 0.5 items to break even — which is realistic.