Free online calculator

Free Shipping Threshold Calculator

Estimate the order value needed for gross profit to cover your shipping subsidy and a target profit amount.. Includes a worked example, formula and practical FAQs.

Suggested threshold—

Formula: Threshold = (shipping cost + target order profit) ÷ gross margin rate

How to use the Free Shipping Threshold Calculator

Estimate the order value needed for gross profit to cover your shipping subsidy and a target profit amount.

Formula

Threshold = (shipping cost + target profit) ÷ (gross margin / 100).

Worked example

With $6 shipping cost, $4 target profit and 40% gross margin, the threshold is ($6 + $4) ÷ 0.40 = $25.

Interpretation and limitations

Gross margin must be positive. The model assumes the margin and shipping cost remain constant across order sizes; packaging, payment fees and other expenses need separate allowance if not included.

Free Shipping Threshold questions

Is the threshold my store’s ideal offer?

Not necessarily. Check average order value, conversion behavior and costs across real baskets before choosing a policy.

Why use margin instead of markup?

The denominator describes the fraction of order revenue available to cover shipping and profit. Markup uses a different cost base.

Continue your calculation

For the next step, use the Shipping Cost Per Order Calculator or the Average Order Value Calculator. Review each tool’s input definitions before carrying a result into another calculation.

Frequently asked questions

Is this calculator free?

Yes. It runs in your browser and does not require an account.

How should I use the result?

Use the result as a planning estimate and verify business-critical decisions against your source records.