Free Shipping Threshold Calculator
Work out the right "free shipping on orders over $X" amount for your online store, one that grows your order value without eating your profit. Works for Shopify, WooCommerce and any US e-commerce store.
What is a free shipping threshold?
A free shipping threshold is the minimum order amount a customer has to spend to get free shipping, like "Free shipping on orders over $50." Orders below it pay for shipping. Orders above it ship free.
Stores use it for two reasons. It removes the surprise shipping charge at checkout, and it nudges shoppers to add one more item to qualify. That raises your average order value (AOV), which is what pays for the free shipping.
How to calculate your free shipping threshold
The right threshold is the order size where the profit on the extra items a customer adds is enough to cover your shipping cost.
Step by step
- Find your average order value. In Shopify, go to Analytics → Reports → Average order value. Use the value before shipping and sales tax.
- Find your average shipping cost. This is what you actually pay per order to USPS, UPS, FedEx or your 3PL, including packaging.
- Find your profit margin. (Selling price − product cost) ÷ selling price. A $100 product that costs you $40 has a 60% margin.
- Divide shipping cost by margin. This tells you how much more a customer has to spend for the extra profit to cover shipping.
- Add that to your AOV and round up. Round to a clean number like $50, $75 or $100 that's easy to remember.
Example
Your average order is $60, shipping costs you $8, and your margin is 50%.
- $8 ÷ 0.50 = $16 of extra spend needed to cover shipping
- $60 + $16 = $76 break-even threshold
- Round up and offer free shipping on orders over $80
The calculator above does these steps for you.
What is a good free shipping threshold?
A good free shipping threshold is one most shoppers can reach with one more item. A common rule of thumb is 15–30% above your average order value. If your AOV is $50, that means somewhere between $58 and $65.
Two quick checks tell you if your number is right:
- Look at how many orders already qualify. If roughly 30–50% of your current orders are above the threshold, it's in a good spot. Under 20% means it's probably too high. Over 70% means it's too low and you're giving away shipping for free.
- Use your median order, not just the average. A few very large orders can pull your average up. The median shows what a typical shopper spends.
Once it's live, test it for 2–4 weeks and watch conversion rate, AOV and profit per order. Pick the threshold that makes you the most profit, not the one with the highest conversion rate.
Free shipping minimums at Amazon, Target and Walmart
US shoppers compare you to the big retailers, so it helps to know what they offer:
| Retailer | Free shipping minimum (no membership) | With membership |
|---|---|---|
| Amazon | $35 | Prime: no minimum |
| Target | $35 | Target Circle Card: no minimum on most items |
| Walmart | $35 | Walmart+: no minimum |
Don't copy their $35 number. Their order volume gets them shipping rates a small brand can't match. Use your own costs and margin to set your threshold. If yours ends up higher, that's normal for a DTC brand.
How to set a free shipping threshold in Shopify
- In your Shopify admin, go to Settings → Shipping and delivery.
- Under General shipping rates, open your shipping profile.
- In the United States shipping zone, click Add rate.
- Name it something like "Free Shipping", and set the price to $0.
- Click Add conditions, choose Based on order price, and enter your threshold as the minimum.
- Save. Set a maximum on your paid rate if you don't want it to show for orders above the threshold.
Then let shoppers know. Put it in your announcement bar, and add a free shipping progress bar to your cart ("You're $12 away from free shipping"). Many Shopify themes and apps have one built in.
How to set a free shipping threshold in WooCommerce
- Go to WooCommerce → Settings → Shipping.
- Open your US shipping zone and click Add shipping method. Choose Free shipping.
- Edit the Free shipping method. Under Free shipping requires, choose A minimum order amount.
- Enter your threshold and save.
Free shipping vs. flat rate shipping
Flat rate shipping charges every order the same fee, like $6.95. It's simple, but the charge shows up at checkout and can cause shoppers to abandon their cart.
Free shipping with a threshold combines both: small orders pay a flat rate, and bigger orders ship free. For most stores this works better than flat rate alone or free shipping on everything, because the threshold helps raise order value and your costs stay covered.
Is offering free shipping worth it?
It's worth it when you set the threshold right. Free shipping with no minimum can wipe out the profit on small orders. A threshold based on your real costs lets you offer free shipping and still make money on every qualifying order.
It's usually not worth it if your margins are very thin or your products are heavy and expensive to ship. If the calculator gives you a threshold far above your average order, fix pricing or shipping costs first.
How to get more shoppers to reach your threshold
- Show a progress bar in the cart so shoppers see exactly how much more they need to add.
- Suggest small add-on products priced near the typical gap, like $10–$20 items.
- Create bundles that land just above the threshold.
- Mention it everywhere: announcement bar, product pages, emails and ads.
- Use it in your paid ads. "Free shipping over $X" in Meta and Google ad copy can raise click-through rate and conversion rate.
Free shipping threshold FAQs
What does free shipping threshold mean?
It's the minimum amount a customer has to spend to get free shipping. For example, "free shipping on orders over $50" means $50 is the threshold.
How do you calculate a free shipping threshold?
Add your average order value to your shipping cost divided by your profit margin. With a $60 average order, $8 shipping and a 50% margin, that's $60 + ($8 ÷ 0.50) = $76. Round it up to $80.
What is a good free shipping threshold?
A good starting point is 15–30% above your average order value. Roughly 30–50% of your current orders should already be above it.
What is the average free shipping threshold?
Amazon, Target and Walmart all use $35 for non-members. Smaller DTC brands usually need a higher threshold because their shipping costs more per order. Base yours on your own numbers.
Does free shipping increase sales?
It usually raises conversion rate, and a threshold raises average order value too. The best way to know for your store is to test it for a few weeks and compare profit per order.
Should I include sales tax in my average order value?
No. Use your average order before shipping and sales tax. Sales tax goes to the state and isn't your revenue.
Should small businesses offer free shipping?
Yes, if you use a threshold. It keeps you competitive with big retailers while making sure the extra items shoppers add pay for shipping.
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