Free Tool
Shipping Cost Calculator
Calculate true shipping costs, determine optimal free shipping thresholds, and understand how shipping impacts your profit margins.
Calculate Shipping Costs
$
$
$
Your actual cost to ship
Profit Impact Analysis
Gross Profit per Order
$45.00
Net Profit per Order
$45.00
After shipping costs
Profit Margin
60.0%
Monthly Shipping Costs
$1600
Free Shipping Threshold
To maintain profitable margins while offering free shipping, set your minimum order threshold at:
Recommended Minimum Order
$32
Covers shipping cost + maintains margin
Conservative (20% margin)$40
Moderate (15% margin)$53
Aggressive (10% margin)$80
Strategy Comparison
Charged Shipping$9000/mo
Higher margin, may reduce conversions
Free Shipping$8510/mo
Lower margin, typically 10-15% more orders
Flat Rate ($5)$9072/mo
Balanced approach, typically 5-10% more orders
Shipping Strategy Best Practices
Free Shipping Strategies
- Set threshold 30% above your average order value to encourage larger purchases
- Build shipping costs into product pricing to offer "free" shipping profitably
- Show progress bars ("$15 away from free shipping!") to motivate customers
- Test different thresholds to find the sweet spot for your customers
Shipping Cost Optimization
- Negotiate rates with carriers once you hit 50-100 orders/month
- Use Shopify Shipping to access discounted USPS and UPS rates
- Optimize packaging to reduce dimensional weight charges
- Consider hybrid models: free shipping for members, charged for non-members
Key Insight
93% of online shoppers are motivated to buy more if free shipping is available. However, absorption free shipping costs requires careful pricing strategy. Most successful stores either: (1) set free shipping thresholds 20-30% above AOV, or (2) build shipping into product prices and offer "free" shipping on all orders.