Free Tool
Free shipping threshold calculator
Find the threshold where free shipping grows your orders instead of eating your margin. It takes three inputs and no email address.
Find it in Shopify under Analytics > Average order value.
Revenue minus product and fulfillment costs, as a percent of revenue.
What you pay per label on a typical domestic order.
Suggested threshold
$70
Break-even threshold
$65.78
Enter an order value above zero, a margin between 1 and 95, and a shipping cost of zero or more.
How the math works
When an order qualifies for free shipping, you absorb the label cost. The order only comes out ahead if the customer spent enough extra to cover it. Every dollar a customer adds above their usual order brings you your gross margin on that dollar, so the extra spend needed to pay for one label is your shipping cost divided by your margin.
The break-even threshold is therefore:
average order value + (shipping cost ÷ gross margin)
With a $48 average order, 45% margin, and an $8 label, that is 48 + 8 / 0.45, which lands at $65.78. Below that number, free shipping costs you more in labels than it earns in extra product margin. Above it, qualifying orders carry their own shipping.
The suggested threshold rounds the break-even up to a clean number customers can aim for, and keeps it at least 20% above your average order value so the free shipping offer actually changes behavior instead of rewarding orders you were getting anyway.
Picking a number customers will reach
A threshold works when it sits within one extra item of a typical cart. If the calculator puts your break-even at double your average order value, most customers will not stretch that far, and the ones who do would likely have spent that anyway. In that case the better levers are raising prices slightly to fold shipping into your margin, or negotiating your carrier rates, rather than setting a threshold nobody reaches.
Once you have your number, the setup has two halves. Shopify handles the free shipping rate natively, and our free shipping threshold guide walks through it step by step. If you also want a minimum order value that customers cannot skip, an order limits app enforces it at checkout.
FAQs
Frequently asked questions
What is a good free shipping threshold?
A common starting point is 20 to 30 percent above your current average order value. That puts the threshold within reach, so customers add one more item to qualify instead of giving up. The break-even number from this calculator tells you the floor: below it, the extra product margin does not cover the shipping label you stop charging for.
Is standard shipping free with a minimum order amount on Shopify?
Not by default. Shopify only offers free shipping over a minimum if you create a $0 shipping rate with a price condition in Settings > Shipping and delivery. Our free shipping threshold guide walks through the exact steps, including the "price can't be $0.00" error many merchants hit.
Should the threshold be above or below my average order value?
Above it. A threshold below your average order value gives free shipping to orders you were already getting, which only costs you margin. Setting it moderately above your average nudges customers to add something to qualify, which is the entire point of the threshold.
How do I make customers actually reach a minimum order value?
A free shipping threshold is an incentive, not a rule. Customers can still check out below it and pay for shipping. If you need every order to clear a baseline, you can enforce a minimum order value at checkout with DC Order Limits, which blocks checkout until the cart meets your number.
Learn More
Related guides
The full Shopify walkthrough, including the "price can't be $0.00" error.
Make your minimum stick
A free shipping threshold only nudges customers toward a bigger cart. DC Order Limits enforces a real minimum by blocking checkout until the cart reaches your number.