The problem

Sellers often pick a free-shipping threshold that sounds appealing (like a round number) without checking whether it actually protects margin once shipping cost is absorbed into orders that just clear the bar.

$0 Higher AOV CURRENT AOV $55 FREE SHIP THRESHOLD $72–$80 GAP CUSTOMERS FILL WITH MORE ITEMS
The gap between current AOV and the free-shipping threshold is the room customers need to fill with added items.

Step-by-step guidance

1. Calculate your current average order value and shipping cost

Pull your actual average order value and average shipping cost per order from recent order history — not estimates.

2. Model a threshold above your current average

Set a candidate threshold high enough that the added items in a typical 'topped-up' order cover the absorbed shipping cost.

3. Test and adjust based on real order data

After launching a threshold, monitor whether average order value actually rises enough to offset the shipping cost you're now absorbing.

Common questions

Is free shipping always worth offering?

Not universally — it depends on your margin structure and whether customers will actually add items to reach the threshold. Model it before committing.

Should the threshold be the same for all products?

Not necessarily — categories with different margins may warrant different thresholds if your platform supports that level of rule-setting.

Related Reading

Sources

General guidance based on publicly available carrier documentation and industry-standard shipping practices, current as of publication. Confirm current rates and rules directly with your carrier.