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Impact Conversion

Free tool

Free Shipping Profitability Calculator

Model the net profitability of offering free shipping above a threshold. See the break-even lift required and how different threshold/price combos play out.

Business Metrics

Your Business

Current Shipping Setup

Test Thresholds

32.5% of orders are above $300 · 62.0% are above $200
Variation 1: Free Shipping >$300
Breakeven 2.0% lift (27 orders/mo)·Test cost $1,460
Easy: low lift needed
Revenue forfeited: $4,381/mo ($52,570/yr)

Variation 2: Free Shipping >$200

7.5%
conversion lift needed to break even
101 additional orders/mo at $161 margin/order
Test cost (33% traffic, 1 month)$5,427
Shipping revenue forfeited
$195,370/yr($16,281/mo)
Moderate: achievable with good execution

Total Test Exposure

Variation 1
$1,460
Variation 2
$5,427
Total (1 month at 33%)
$6,887

Maximum downside if no winner found. Actual exposure is lower if order volumes don't change.

Scenario Matrix

Net annual profit impact across CVR lift + AOV lift combinations

Incremental orders don't cost ad spend. Visitors are already on site
AOV ↓ / CVR →+1%+2%+3%+5%+7%+10%+15%
+$0-$162,127-$128,884-$95,641-$29,156+$37,330+$137,059+$303,273
+$10-$65,209-$31,966+$1,277+$67,762+$134,248+$233,977+$400,191
+$20+$31,709+$64,952+$98,195+$164,680+$231,166+$330,895+$497,109
+$30+$128,627+$161,870+$195,113+$261,598+$328,084+$427,813+$594,027

Each cell shows the net annual profit impact if you achieve that combination of CVR lift and AOV lift. Green = profitable, red = loss. Darker = larger magnitude. Click any cell for a plain English breakdown.

Key Takeaways

Variation 1 breaks even at just a 2.0% conversion lift, which is 27 extra orders/mo.

Variation 2 requires a 7.5% conversion lift to break even, but if the threshold pushes AOV up by $20, it's profitable at virtually any conversion improvement.

Maximum test cost: $6,887over one month. If neither variation wins, you've spent $6,887to definitively learn that shipping isn't your conversion barrier.

Incremental orders don't cost CPA. Those visitors are already on site. The “Realistic” scenario is the right default.

The forecast is step one. Testing is step two.

This calculator tells you whether a free shipping threshold is worth testing. The test itself tells you whether customers agree. Use the A/B test calculator to plan sample size and check significance, or the RPV calculator to forecast broader revenue impact from a CRO program.

Shipping threshold tests are part of our conversion rate optimisation service.

Free shipping calculator FAQ

How do I calculate whether free shipping is profitable?
Compare the margin you lose on absorbed shipping against the extra revenue from the conversion lift free shipping creates. This calculator models both sides: it shows the break-even lift required and how different threshold and price combinations change the outcome.
What is a free shipping threshold?
A minimum order value customers must reach before shipping becomes free. Setting it above your average order value encourages larger carts, which can offset the cost of absorbing shipping. The calculator lets you model different thresholds to find the sweet spot.
Does free shipping actually increase conversion rate?
In most D2C stores, yes. Unexpected shipping costs are one of the top reasons for cart abandonment. The question is whether the conversion lift is large enough to cover the margin hit. That is exactly what this calculator answers.
Should I A/B test free shipping before rolling it out?
Yes. The calculator gives you a forecast, but real customer behaviour is the proof. Test the threshold as a pricing experiment and measure revenue per visitor, not just conversion rate, so you catch any average-order-value shifts.