Work out shipping cost threshold instantly with clear inputs, formula shown and shareable results.
The break-even order value for free shipping is the shipping cost divided by gross margin. Adding a contribution target raises the threshold, and setting it above current average order value is what makes customers add items.
Shipping threshold
Break-even = shipping cost / gross margin; threshold = shipping cost / (margin - target contribution)
Figures are estimates based on the inputs given. Marketing performance, platform fees and conversion behaviour vary by audience, channel and season. Use this as a planning guide, not a forecast.
Yes, typically 20-30% above, so it changes behaviour rather than simply giving away margin.
Use a weighted average, or set zone-based thresholds where the variation is large.