What this calculator tells you
Free shipping is a pricing decision, not only a shipping decision. The order has to generate enough contribution to absorb the label and handling cost while still leaving room for overhead.
When to use it
Use it before adding a free shipping bar, changing a current threshold, or testing an incentive intended to lift average order value.
Start with your landed cost, real fee rates, and a pessimistic advertising cost. The result is more useful when the assumptions are honest.
Setting a threshold equal to the average order value can turn a neutral promotion into a permanent margin cost for customers who were already going to buy.
Frequently asked questions
What contribution margin should I use?
Use the margin left after product, fulfillment, and payment fees but before the free shipping cost. If you do not know it, run a conservative and a normal case.
Does the threshold guarantee incremental profit?
No. It only covers the shipping cost on qualifying orders. The customer may have bought anyway, so measure incremental order value separately.
Should heavy products use a different threshold?
Yes. Shipping cost can vary substantially by size and destination. A blended threshold may not protect margin on every product.
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