Free tool
From what threshold does free shipping pay off?
Free shipping is the strongest conversion tool in e-commerce — and the fastest way to kill your margin when the threshold is set wrong. The calculator finds a safe threshold and the net profit impact from your own numbers.
How it works
Why this formula?
Basket-building covers the shipping
A customer with a cart below the threshold tops it up to qualify for free shipping. The extra margin from the top-up — (threshold − AOV) × margin — has to cover the shipping the store absorbs. That is exactly where the threshold formula comes from.
Conversion uplift is the other side of the equation
Free shipping reduces cart abandonment — unexpected shipping costs are consistently the most common abandonment reason (Baymard Institute). The calculator therefore also computes the net monthly impact at your chosen uplift.
Cheaper shipping = lower threshold
The less you pay the carrier, the lower the threshold you can afford — and the more orders qualify for it. Multi-carrier platforms cut shipping costs by 20–60% versus list prices.
FAQ
Frequently asked questions
How is the free shipping threshold calculated?
The core formula: threshold = average order value (AOV) + shipping cost ÷ margin. A customer who tops up their cart to the threshold covers the absorbed shipping with the extra margin. With an AOV of €40, a 35% margin and €4 shipping, the threshold comes out at ~€52.
How much does free shipping increase conversion?
E-commerce conversion studies typically report +10–20% more orders after introducing free shipping above a threshold. The exact number depends on your product mix and competitors — which is why the calculator takes it as an input and also shows the break-even value.
Why round the threshold up?
A threshold below the break-even value means the absorbed shipping outweighs the extra margin — the store loses money on free shipping. Rounding up to a €5 step keeps the offer marketable and the threshold on the safe side.
How do I lower my shipping cost so the threshold can be lower?
The fastest lever is cheaper shipping: a multi-carrier platform such as Sendcloud gives smaller stores volume rates 20–60% below list prices. Lower shipping cost = lower threshold = more qualifying orders.
Quick facts
Free shipping threshold for online stores
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Summary
The free shipping threshold is calculated as: threshold = AOV + shipping cost ÷ margin. For a typical EU online store (AOV €40, 35% margin, €4 shipping) the recommended threshold is ~€52–55. Free shipping typically increases order volume by 10–20%; it pays off when the extra margin from new orders exceeds the absorbed shipping cost of qualifying orders (~35% of carts).
- Threshold formula
- AOV + shipping ÷ margin
- Typical threshold (AOV €40)
- ~€52–55
- Typical conversion uplift
- +10–20%
- Qualifying orders
- ~35% of carts