++++ Plate 00 · Free-shipping thresholdCalculator
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Where should your free-shipping threshold actually sit?

Set it too low and you pay shipping on orders you already had. Set it too high and nobody stretches. The zone that moves cart size is 1.2 to 1.4 times your AOV, priced against what absorbing shipping really costs you. Answer four questions and get your number, with the break-even math shown.

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By Taylor Sicard · co-founded WIN Brands Group and scaled it past $100M · the same threshold math tested across the brands I've operated and advised
The method behind the number
The margin math a threshold has to clear.
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Method

How the number is calculated

Two calculations. The placement: 1.2 to 1.4 times your AOV is the zone where a threshold changes behaviour, and the tool suggests a clean number near 1.3x, rounded to the nearest $5. The affordability: your average shipping cost divided by your gross margin is the extra AOV a qualifying order must add for the offer to pay for itself. The zone is an operator rule from the brands I've operated and advised: treat it as the starting point to test around, not a law.

Threshold 1.2 to 1.4x your AOVReachable stretch. This is the zone that moves cart size.
Between your AOV and 1.2x, or above 1.6xEither too easy or too far to change behaviour. Nudge it into the zone.
Below your AOVYou are paying shipping on orders you already had. Move it or drop it.

A threshold is an AOV lever, not a conversion cure: the checkout side of the story lives in the conversion revenue-leak calculator, and if returns are eating the margin the threshold protects, run the returns cost calculator next. All of the free DTC calculators share these benchmarks.

Questions

Common questions

What should my free-shipping threshold be?
1.2 to 1.4 times your average order value, rounded to a clean number. Across the brands I've operated and advised, that zone is the reachable stretch: close enough that shoppers add one more item to qualify, far enough that you are not giving shipping away on orders you already had. This calculator suggests a rounded number near 1.3x.
Why 1.2 to 1.4 times AOV?
Below your AOV, most orders qualify without changing behaviour, so you absorb shipping cost for nothing. Much above 1.6x, the stretch is too far and shoppers ignore it. The 1.2 to 1.4x band is where a threshold actually moves cart size. It is an operator rule from the brands I've operated and advised, not a law of physics, so treat it as the starting point to test around.
How do I know if absorbing shipping breaks even?
Divide your average outbound shipping cost by your gross margin. At $8.50 shipping and a 55% gross margin, a qualifying order needs $15.45 of extra AOV to pay for its own shipping. If the threshold lifts qualifying orders by more than that, the offer funds itself. If not, it is a discount wearing a costume.
Should I offer free shipping at all?
Your margin structure decides, not your competitors. Run the lift-needed number from this calculator: if your gross margin is thin and your shipping cost is heavy, the AOV lift required may be more than a threshold can realistically produce. In that case, build shipping into the price or use a flat rate instead of absorbing it.
Is a threshold better than flat-rate shipping?
They solve different problems. A threshold is an AOV lever: it exists to pull carts up to a number. Flat-rate is a conversion lever: it removes surprise at checkout without giving shipping away on every order. Thin-margin, low-AOV brands often do better with flat-rate; brands with a plausible add-one-more-item path do better with a threshold.
Does free shipping increase conversion?
Unexpected shipping cost is the most commonly stated reason shoppers abandon carts, so removing it helps conversion. But the margin math still has to clear: a conversion lift that costs more in absorbed shipping than it adds in contribution is a loss. Judge both sides; the conversion revenue-leak calculator covers the conversion half.