Net after shipping gift
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Free Shipping Threshold Profitability Estimator
Margin after you gift shipping once the cart crosses a free-shipping threshold.
Page updated 2026-09-14.
Calculator
Calculated Results
Shipping you gifted
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Margin on merchandise
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One cart, and whether the free-shipping gift still leaves a profit
A $58 cart clears a $50 free-shipping threshold, so the seller gifts $7.80 in true shipping cost. After also subtracting $22 in merchandise COGS and a 2.9% payment processing fee, net profit on this cart is $26.52 -- a 45.72% margin on the merchandise total, even after absorbing the full shipping cost.
The $7.80 gifted shipping is a real, fixed cost regardless of cart size once the threshold is cleared -- a $51 cart and a $500 cart both gift the same $7.80 if shipping cost is flat, meaning the free-shipping cost as a percentage of cart value shrinks fast as cart size grows past the threshold.
This is why a free-shipping threshold set close to a store's average order value is often the wrong strategy: it's designed to nudge cart size upward, and the payoff is strongest when the threshold sits somewhat above typical cart value, encouraging one more add-to-cart rather than applying to carts that would have hit that size anyway.
What this snapshot doesn't capture
One cart snapshot. AOV lift from the threshold is not modeled. The real value of a free-shipping threshold comes from its effect on average order value across many carts -- if it nudges customers who would have spent $40 up to $50+ to qualify, that lift is the actual return on the shipping giveaway, and it isn't part of this single-cart math.
True shipping cost ($7.80) should reflect your real carrier cost for that specific cart's weight and destination, not a flat estimate -- a heavier or farther-shipping cart gifted under the same threshold could erode profit more than this example shows.
For carts that don't clear the threshold, no shipping is gifted, but that's also not modeled here -- this calculator specifically prices the scenario where the threshold has been met.
Related shipping and margin questions
To find the true carrier cost feeding into this calculation, the Product Packaging & Box Shipping Weight Calculator estimates billable weight for a given box.
If cart abandonment (rather than free shipping) is the bigger conversion lever to model, the Ecommerce Cart Abandonment Loss Estimator covers that separately.
Frequently Asked Questions (FAQ)
How is the $26.52 net profit calculated?
Cart value ($58) minus COGS ($22), minus gifted shipping ($7.80), minus payment fee (2.9% x $58 = $1.682) = $26.518, rounding to $26.52.
Does the gifted shipping cost stay the same regardless of cart size?
In this calculator, yes -- it's whatever true shipping cost you enter, applied once the cart clears the threshold. In reality, shipping cost varies by weight and destination, so a heavier qualifying cart would gift more shipping cost than a lighter one, even though both clear the same dollar threshold.
Does this model how the threshold affects average order value?
No. One cart snapshot. AOV lift from the threshold is not modeled. This prices a single cart's profitability at the given size. The broader strategic value of a free-shipping threshold -- nudging customers to add more to their cart to qualify -- isn't captured in this single-cart calculation.
What happens if the cart doesn't clear the threshold?
This calculator specifically models the scenario where the cart has cleared the threshold and shipping is gifted. A cart below the threshold would typically pay for its own shipping, which is a different, unmodeled scenario.
Where should the free-shipping threshold be set relative to average order value?
A threshold set somewhat above your current average order value is more likely to lift cart sizes meaningfully. A threshold at or below typical cart value mostly just gifts shipping on orders that would have happened anyway, without the intended upsell effect.
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