Free-shipping threshold calculator
Free shipping only works if bigger baskets pay for the delivery you absorb. This calculator finds the order value to set your threshold at, and shows how much your average basket needs to grow to cover the cost. Enter your average order value, shipping cost and gross margin to see it.
Your numbers
Consider setting free shipping at $70.00.
Baskets only need to grow 17% to cover your $6.00 shipping cost.
Covered. A basket topped up to $70.00 earns you $6.00 in extra margin, enough to cover your $6.00 shipping.
- Current average order value
- $60.00
- Extra spend to reach threshold
- $10.00
- Margin on that extra spend
- $6.00
- Shipping cost to cover
- $6.00
Estimates only, based on the numbers you enter. This assumes your gross margin applies to the extra spend a customer adds to reach the threshold, and doesn't account for customers already above it, returns or the effect of the offer on demand.
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Apply for fundingFree-shipping threshold FAQ
It's the order value above which you offer free shipping, for example "free shipping over $60." Customers below it pay for delivery; customers at or above it don't, which is why the threshold needs to sit high enough that the extra margin from bigger baskets covers the shipping cost you absorb.
The standard formula is your shipping cost divided by your gross margin, added to your current average order value: threshold = AOV + (shipping cost / margin). That's exactly what this tool works out, then rounds up to a clean number you can actually advertise.
Average order value is your total revenue divided by your number of orders over a period, the typical amount a customer spends in one purchase. It's the starting point for this calculator, since the recommended threshold is set relative to it rather than as a flat number.
It's one of the most consistently effective incentives in ecommerce for lifting conversion and average order value, since customers routinely add items to a basket just to clear a free-shipping threshold. The catch is that it only helps your bottom line if the threshold is set high enough to cover what you're giving away, which is what this tool checks before you offer it.
This tool shows the extra spend needed on top of your current AOV to reach the threshold, plus that same figure as a percentage uplift, so you can judge whether it's a realistic ask for your typical customer or a stretch.
No. The calculation assumes your gross margin applies evenly to the extra spend needed to reach the threshold, and doesn't account for customers who were already spending above it, returns, or how the offer itself might change buying behaviour. Treat the result as your cost-covering floor, not a full profit forecast.
Check the margin on a bundle with the bundle pricing calculator, or the maths on a straight discount with the discount break-even calculator. Browse every tool in the full Black Friday toolkit.