What should my free shipping threshold be?
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Everything below is measured against it, so it goes first.
Display only. Your figures are read in the currency you pick — nothing is converted and no exchange rate is applied. The answer does not depend on the unit: a threshold in rupees works out exactly like a threshold in dollars.
What a typical order brings in before shipping and tax, over one recent period.
Enter your average order value. Everything below is measured against your average order. Use what a typical order brought in over one recent period, before shipping and tax.
- Average order valueNeeded
- Gross margin, as a percentageNeeded
- What an order costs you to shipNeeded
- A sample basket, which draws the bar a shopper would seeThen
The break-even figure is arithmetic. The reach band and the floor that keeps the bar at least 10% above your average order are our own judgement, not a published benchmark — nobody publishes a threshold benchmark with a disclosed sample, so none is cited here. The currency is a label: your figures are read in the currency you choose and nothing is converted. The worked examples further down the page are a fixed illustration and stay in US dollars whichever currency you pick here.
Nothing you type is sent anywhere. There is no account, no install and no store connection — the arithmetic runs where you are reading it.
What sets the threshold
A free shipping threshold is the cart value at which the extra margin on a bigger basket exactly pays for the shipping you stop charging for, so a store with a 60 dollar average order, a 45 percent margin and 9 dollars of shipping breaks even at 80 dollars.
No published benchmark is used on this page, because none exists with a disclosed sample. The break-even figure is arithmetic; the reach bands and the floor that keeps the recommendation at least 10% above average order value are our own judgement and are labelled as such wherever they appear.
Three numbers you already have. The one worth understanding is margin: a bigger basket only hands you the margin share of the extra spend, so covering a parcel always takes more basket than the parcel costs.
- Average order value
- What a typical order brings in before shipping and tax, averaged over the orders in one recent period. Use a recent window. A figure from a year with a different product mix in it answers a question you are not asking.
- Gross margin
- The share of an order left after the cost of the goods, as a percentage. Not net margin: payment fees, ad spend and overheads do not belong here, because the question is only whether the extra items on a bigger basket cover the parcel.
- Shipping cost
- What the order actually costs you to ship: carrier rate, packaging and any handling you pay for. Not what you currently charge the shopper. The gap between those two is the whole reason the threshold exists.
- The extra basket that pays for the parcel
- This is the part worth understanding. A larger basket only hands you the margin share of the extra spend, so covering a parcel takes more extra basket than the parcel costs. At a 45 percent margin, 9 of shipping needs 20 of extra basket.
- The break-even threshold
- Your average order with that extra basket on top. It is the point where a qualifying order at the minimum earns exactly what an average order paying its own shipping earned. It is a floor. It is not a recommendation, and every calculator that presents it as one is handing you the least interesting point on the line.
- The recommended threshold
- Never below the break-even floor, never less than 10 percent above your average order, and landed on a round step of 5. The second floor exists because a threshold two units above the average basket is free shipping with extra steps: the average shopper already clears it and changes nothing.
- The reach band
- How far the recommendation sits above your average order: standard stretch, then ambitious, then out of reach for most carts. These cut points are our own judgement. No publisher prints a threshold benchmark with a disclosed sample, so none is cited here and none is implied.
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Thresholds within reach, and thresholds that are not
Illustrative arithmetic, not customer data. Every figure below is produced by the same function the calculator above runs, so the two cannot disagree.
| Store shape | AOV | Margin | Shipping | Break-even | Recommended | Reach |
|---|---|---|---|---|---|---|
| Apparel store, standard parcel | $60 | 45% | $9 | $80 | $8033.3% over AOV | Standard stretch |
| Skincare, light parcel and strong margin | $48 | 72% | $5 | $54.94 | $5514.6% over AOV | Standard stretch |
| Supplements, subscription-style basket | $85 | 55% | $7.5 | $98.64 | $10017.6% over AOV | Standard stretch |
| Electronics accessories, thin margin | $40 | 18% | $8 | $84.44 | $85112.5% over AOV | Out of reach for most carts |
| Home and kitchen, bulky freight | $120 | 40% | $28 | $190 | $19058.3% over AOV | Ambitious |
| Jewellery, small parcel and high margin | $150 | 68% | $6 | $158.82 | $16510% over AOV | Standard stretchheld up by the 10% floor |
| Pet food, heavy and low margin | $55 | 25% | $12 | $103 | $10590.9% over AOV | Out of reach for most carts |
Where a threshold can mislead you
It assumes the extra basket carries your average margin
It very often does not. The item a shopper adds to clear a threshold is usually whatever is cheap and near the cart, which is frequently your worst-margin line. If your add-on products run below your blended margin, the real break-even sits above the number on this page.
One shipping cost stands in for a whole rate card
A real store pays different amounts by weight, zone and carrier, and a single average hides the orders that lose money badly. If your shipping cost has a long tail (bulky items, remote postcodes, international), run the calculator again on the expensive end and see whether the threshold still holds.
It says nothing about how many baskets will actually clear it
The answer is about one order at the threshold. Whether your basket distribution has enough carts sitting just below the line to be worth nudging is a question about your own order data, not about this calculation. A perfect threshold that only 2 percent of carts approach is not doing anything.
The reach bands are judgement, not measurement
The break-even figure is arithmetic and is as true as your inputs. The bands and the 10 percent floor are ours. We have not found a publisher who prints threshold performance with a disclosed sample, and inventing one with a citation attached is the failure this whole set of tools exists to avoid.
A threshold nobody sees is not a threshold
The number only does work if the shopper learns about it while the cart is still open and still short. That is a merchandising problem, not an arithmetic one, and it is why this page previews the message rather than stopping at the figure.
Free shipping threshold questions
How is a free shipping threshold worked out?
It is the basket size at which the margin on the extra spend has paid for the parcel you stopped charging for. At a 60 dollar average order, a 45 percent margin and 9 dollars of shipping, the extra basket needed is 20 dollars, so the break-even threshold is 80 dollars. The calculator above works it out for your own three numbers.
Should I set my threshold at the break-even number?
No. Break-even is the floor, not the target. At exactly break-even an order that qualifies at the minimum earns you the same gross profit as an average order that paid its own shipping, so you have given away the shipping revenue and gained nothing. Anything above the floor is where the upside is.
How far above my average order value should the threshold sit?
Far enough that clearing it requires adding something, close enough that adding one item is enough. This tool holds the recommendation at least 10 percent above average order value and flags anything landing more than 35 percent above as ambitious and more than 60 percent above as out of reach for most carts. Those bands are our judgement, not a published benchmark.
What if my margin is too thin for any threshold to work?
Then the tool says so. At a low margin the break-even threshold can land at double your average order or worse, which means most baskets never reach it and the offer does nothing. The honest options at that point are a cheaper shipping rate, a partial subsidy, or no free shipping offer at all.
Does a free shipping bar actually change what people spend?
A threshold only works if the shopper knows about it while they still have the cart open, which is what a progress bar is for. This page previews the message so you can read it before you commit to the number. It does not claim a lift figure, because any figure we quoted would be about another store, measured on its traffic.
Does this tool need my store, an account or an install?
No. It runs entirely in the page, takes three numbers you already have, and sends nothing about your store anywhere.
A threshold grows orders only when shoppers can see it.
A shopper close to the line needs to know how close. Nudgesmart renders the threshold as a notification bar on the storefront and can gate it on what is already in the cart.
