Free Shipping Break-Even Calculator
The order value where free shipping stops costing you.
Break-even order value
$15.00
to cover $6.00 at 40.0% margin
Set the threshold 20-40% above your average order value — high enough to prompt adding an item, low enough to feel reachable.
How the Free Shipping Break-Even Calculator works
Free shipping is never free — it is funded from margin. The break-even order value is where the gross margin on the basket covers the shipping you absorb, and setting the threshold a little above it is what turns the offer from a cost into a lever.
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
How do I calculate the break-even threshold?
Shipping cost ÷ gross margin percentage. Absorbing £6 of shipping at a 40% margin needs a £15 order to break even. Set the threshold above that so the offer also lifts basket size.
How much above break-even should the threshold sit?
Commonly 20-40% above your current average order value — high enough to encourage adding an item, low enough to feel achievable. Setting it far beyond reach simply removes the incentive.
Does free shipping actually increase sales?
Consistently, yes. Unexpected shipping cost is the most cited reason for cart abandonment across many studies. A threshold also reliably raises average order value as buyers add items to qualify.
Should I offer it on everything?
Rarely. Site-wide free shipping regardless of order value subsidises small orders from large ones and can be badly loss-making at the low end. A threshold captures most of the conversion benefit at a fraction of the cost.