{
    "name": "Free Shipping Threshold Calculator",
    "url": "https://calculators.geekmidst.com/calculators/free-shipping-threshold-calculator",
    "markdown": "https://calculators.geekmidst.com/calculators/free-shipping-threshold-calculator.md",
    "category": "Commerce & retail",
    "description": "Find the minimum order value for free shipping at which the extra gross margin pays for the shipping you absorb, based on your AOV and margin.",
    "summary": "If you pay for shipping, each qualifying order must bring in enough extra margin to cover it. The break-even threshold is your average order value plus shipping cost divided by gross margin.",
    "also_called": [
        "Free delivery threshold calculator",
        "Minimum order value calculator"
    ],
    "applies_to": "Worldwide",
    "last_updated": "2026-10-29",
    "computation": "Results are computed in the visitor’s browser on the HTML page. This API describes the calculator; it does not compute results.",
    "inputs": [
        {
            "name": "aov",
            "label": "Current average order value",
            "type": "number",
            "default": "45"
        },
        {
            "name": "margin_pct",
            "label": "Gross margin",
            "type": "number",
            "default": "40",
            "unit": "%"
        },
        {
            "name": "shipping_cost",
            "label": "Shipping cost you would absorb per order",
            "type": "number",
            "default": "6"
        },
        {
            "name": "currency",
            "label": "Currency",
            "type": "currency",
            "default": "USD"
        }
    ],
    "outputs": [
        {
            "key": "threshold",
            "label": "Break-even free-shipping threshold",
            "format": "currency"
        },
        {
            "key": "increase",
            "label": "Extra order value needed",
            "format": "currency"
        },
        {
            "key": "increase_pct",
            "label": "Increase on current AOV",
            "format": "percent"
        },
        {
            "key": "margin_on_threshold",
            "label": "Gross margin on a threshold order",
            "format": "currency"
        }
    ],
    "formula": {
        "text": "Extra value = Shipping cost ÷ Gross margin;  Threshold = AOV + Extra value",
        "variables": {
            "AOV": "average order value before free shipping",
            "Gross margin": "as a fraction of revenue"
        }
    },
    "worked_example": {
        "inputs": {
            "aov": "45",
            "margin_pct": "40",
            "shipping_cost": "6",
            "currency": "USD"
        },
        "steps": [
            "Extra value = 6 ÷ 0.40 = 15.",
            "Threshold = 45 + 15 = 60.",
            "That is 15 ÷ 45 = 33.33% above the current AOV."
        ],
        "result": "At a 40% margin, a 60 threshold lets the extra 15 of basket pay for the 6 of shipping."
    },
    "interpretation": "This is the break-even floor. If most customers would need to add a lot to reach it, few will; if it sits only slightly above your AOV, many will stretch to it. Test the threshold and watch AOV, conversion and shipping cost together.",
    "assumptions": [
        "Customers below the threshold keep paying for shipping as now.",
        "The extra items carry the same gross margin as the rest of the basket."
    ],
    "limitations": [
        "It does not predict how many customers will raise their basket; that needs testing."
    ],
    "rules": null,
    "faqs": [
        {
            "question": "Should the threshold be above or below my AOV?",
            "answer": "Usually somewhat above, so customers add an item to qualify. A threshold below your AOV gives free shipping to orders that would have happened anyway."
        },
        {
            "question": "What if shipping cost depends on weight?",
            "answer": "Use the average shipping cost for orders near the threshold."
        }
    ],
    "sources": [],
    "related": [
        {
            "name": "Cart Upsell Revenue Calculator",
            "url": "https://calculators.geekmidst.com/calculators/cart-upsell-revenue-calculator"
        },
        {
            "name": "Shipping Zone Cost Calculator",
            "url": "https://calculators.geekmidst.com/calculators/shipping-zone-cost-calculator"
        },
        {
            "name": "Profit Margin Calculator",
            "url": "https://calculators.geekmidst.com/calculators/profit-margin-calculator"
        },
        {
            "name": "Break-even Calculator",
            "url": "https://calculators.geekmidst.com/calculators/break-even-calculator"
        }
    ],
    "disclaimer": null,
    "publisher": "GM¹X CalcVerse"
}