Discount vs Free Shipping Calculator

The crossover sits at a specific basket value.

Written and maintained by Mohit PatelLast checked August 4, 2026How we build these

Currency

Average order value

Contribution margin

Discount option

Shipping cost

Conversion uplift from the discount

Conversion uplift from free shipping

Orders per month

Better offer

Free shipping

by $1,183 a month

Discount contribution$25,794

Free shipping contribution$26,977

Cost of the discount$7,586

Cost of free shipping$7,934

A percentage discount costs more on high baskets and free shipping costs the same on all of them, so the crossover sits at an order value of about $58.00. Above that, the discount is the more expensive offer.

How the Discount vs Free Shipping Calculator works

A percentage discount costs more on high baskets and free shipping costs the same on all of them, so the crossover sits at a specific order value. Below it, the discount is cheaper; above it, free shipping is.

Also known as: free shipping or percent off · which offer is cheaper · shipping offer comparison

Two offers at the same cost

Free shipping and a discount can cost identical amounts and perform very differently, because customers do not weigh them equally.

Shipping charges are consistently found to be among the strongest causes of cart abandonment, and the reason is that they appear late and feel like a penalty rather than a price. A £6 delivery charge on a £60 order irritates more than a £6 higher product price would.

Which means free shipping frequently outperforms an equivalent discount on conversion, at the same margin cost. That is not universal and it is common enough to be worth testing rather than assuming the discount is stronger.

Costing each option

A percentage discount costs a percentage of every order, so its cost scales with the basket. Free shipping costs a roughly fixed amount per order, so it is proportionally expensive on small orders and cheap on large ones.

On a £30 order, £5 of free shipping is 16.7%. On a £120 order it is 4.2%. A 10% discount is the reverse: £3 and £12.

So the crossover depends on the order value. Free shipping is the cheaper offer above a certain basket size and the more expensive one below it, and knowing where that crossover sits for your own average order value determines which to run.

The threshold version

Free shipping above a threshold combines the conversion benefit with basket building, and it is usually the strongest of the three structures.

The threshold sits above the average order value by enough to require a step up. Customers below it are shown how much more is needed, which is a prompt to add rather than a discount given.

It also caps the cost, since the offer only applies where the order value can absorb the shipping. Free shipping on everything is the expensive version; free shipping above a calculated threshold is the same benefit applied where it pays.

Building shipping into the price

The fourth option is raising prices to cover shipping and offering it free always. It removes the friction entirely and it makes the product price less competitive on comparison.

Whether that works depends on how customers shop the category. Where comparison is by product price, as on marketplaces and shopping feeds, absorbing shipping into the price is punishing. Where the customer is on your site and comparing total cost, it is straightforwardly better.

Marketplaces frequently force the decision by ranking on total price or by requiring free shipping for prominence. In those channels the choice has usually been made for you, and the question becomes whether the category is viable at all with shipping absorbed.

Testing which works

This is one of the more testable questions in ecommerce, because both offers can run concurrently to split traffic and the outcome measure is clear.

The measure has to be contribution rather than conversion. An offer that converts better and gives away more margin can be worse, and conversion-only testing will not show it.

Run it long enough to cover the order value distribution, since a short test can be dominated by whichever offer suited the baskets that happened to arrive. Two weeks is usually a minimum and four is better on modest traffic.

Where to go next

The Discount vs Free Shipping question rarely arrives on its own. These are the ones that usually come with it:

Free Shipping vs Discount Conversion Calculator — Fixed cost against a percentage cost.
Free Shipping Break-Even Calculator — The order value where free shipping stops costing you.
Percentage Off Calculator — And the volume it needs to break even.
Etsy Fee Calculator — Every Etsy fee on one sale, itemised.

Not financial advice. Marketplace fees change, and they vary by country, plan and seller status. Every rate here is an editable default, not a quoted price, check the platform's current fee schedule before you price a product against it. This is not tax or business advice.

Frequently asked questions

Which offer costs less?

Free shipping on baskets above the crossover, the discount below it. The crossover is the shipping cost divided by the discount rate.

Which converts better?

Free shipping, in most tests, because shipping cost is the abandonment reason customers actually cite. That advantage is separate from which one costs less.