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

Annual orders16,153

Average order value$268

Variable costs % (incl ad spend)40%

Cost per acquisition$45

Current Shipping Setup

Current charge (above threshold)$10

Current charge (below threshold)$30

Test Thresholds

Variation 1 — free shipping above$300

Orders above this threshold5,257(32.5% of orders)

Variation 2 — free shipping above$200

Orders above this threshold10,017(62.0% of orders)

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 — that's 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.