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Shopify Shipping Margin Calculator

Free shipping is the single biggest cause of invisible margin erosion for Shopify stores. This calculator finds your true break-even shipping threshold — so you're not giving profit away.

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Frequently asked questions

How do I calculate the right free shipping threshold for Shopify?
Divide your average shipping cost + COGS by your target gross margin percentage. For most stores, the free shipping threshold should be set at 2–2.5x the average product cost to remain profitable after all fees.
Does offering free shipping increase Shopify conversion rates?
Yes — studies consistently show free shipping increases conversion rates by 15–30%. The goal is not to remove free shipping but to set the threshold high enough that the margin gain from higher AOV offsets the shipping cost.