# Free Shipping Threshold Calculator

> 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.

Category: Commerce & retail · Applies to: Worldwide · Last updated: 2026-10-29
Interactive calculator: https://calculators.geekmidst.com/calculators/free-shipping-threshold-calculator

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.

## Inputs
- Current average order value (default 45)
- Gross margin (unit %; default 40)
- Shipping cost you would absorb per order (default 6)
- Currency

## Results
- Break-even free-shipping threshold
- Extra order value needed
- Increase on current AOV
- Gross margin on a threshold order

## Formula

```
Extra value = Shipping cost ÷ Gross margin;  Threshold = AOV + Extra value
```

Where:
- AOV: average order value before free shipping
- Gross margin: as a fraction of revenue

## Worked example
1. Extra value = 6 ÷ 0.40 = 15.
2. Threshold = 45 + 15 = 60.
3. 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.

## What the result means

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 and limits
- Customers below the threshold keep paying for shipping as now.
- The extra items carry the same gross margin as the rest of the basket.
- It does not predict how many customers will raise their basket; that needs testing.

## Questions

### Should the threshold be above or below my AOV?

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.

### What if shipping cost depends on weight?

Use the average shipping cost for orders near the threshold.

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- [Shipping Zone Cost Calculator](https://calculators.geekmidst.com/calculators/shipping-zone-cost-calculator)
- [Profit Margin Calculator](https://calculators.geekmidst.com/calculators/profit-margin-calculator)
- [Break-even Calculator](https://calculators.geekmidst.com/calculators/break-even-calculator)

Source: GM¹X CalcVerse — https://calculators.geekmidst.com/calculators/free-shipping-threshold-calculator