How to choose a free shipping threshold for your Shopify store

Start with your average order value

Your average order value (AOV) is your total sales divided by the number of orders over the same period. In Shopify admin, open Analytics and look for Average order value. Use at least the last 90 days so one busy week doesn’t skew it.

The threshold should sit above your AOV. If it’s below, most customers already qualify, and you’re giving away shipping without changing what anyone buys.

A common starting point: 15–30% above AOV

Many stores start with a threshold somewhere between 15% and 30% above their AOV. That gap is small enough to feel reachable with one more item, and large enough to change the order. Treat it as a starting point, not a rule. What matters is whether one of your products fits the gap.

Look at your best sellers. If your AOV is $42 and you have several popular items around $10–15, a $55 threshold is easy to explain: “add one more thing.” If your cheapest add-on is $30, a $55 threshold will feel out of reach for anyone at $40.

Check the threshold covers its own cost

Free shipping isn’t free for you. A quick way to sanity-check a threshold is to make sure a customer who just reaches it still leaves you at least as much gross profit as a typical order does today.

Minimum threshold = AOV + (shipping cost ÷ gross margin)

Here’s an example. Your AOV is $40, your gross margin is 50% and an average shipment costs you $7.

• $7 ÷ 0.5 = $14 of extra sales needed to pay for the shipping.
• $40 + $14 = $54 minimum threshold.

At a $50 threshold, a customer who spends exactly $50 brings in $25 of gross profit, and you pay $7 to ship it, leaving $18. Today’s typical $40 order brings in $20. At $55, you keep $20.50, so the offer pays for itself even before counting any extra customers who convert because of it.

This check is deliberately cautious. Free shipping often lifts conversion too, which improves the picture. But it stops you from choosing a number that loses money on every qualifying order.

Set up the free shipping rate in Shopify

The threshold only matters if checkout actually applies it. In Shopify admin:

1. Go to Settings → Shipping and delivery.
2. Open the shipping profile you use (usually General shipping rates).
3. In each shipping zone where you want the offer, choose Add rate.
4. Name it something clear, such as “Free shipping”, and set the price to 0.
5. Choose Add conditions, select Based on order price and enter your threshold as the minimum price.
6. Save, then place a test order just below and just above the amount to check both cases.

If you sell in more than one currency, check the threshold in each market so a round number in one currency doesn’t become an odd one in another.

Tell shoppers how close they are

A threshold nobody notices won’t change behaviour. Mention it near the top of the page and in the cart, and update it as the cart changes: “Add $12 more for free shipping” is far more motivating than a static banner.

ShipLift Progress Bar does this for Shopify stores. It shows a live bar that updates as items are added, with optional reward tiers and a small celebration at the goal. It shows progress only, so set up the matching rate in Shopify first, as above.

Review it after a month

Compare the four weeks before and after the change: average order value, conversion rate and the share of orders that qualified for free shipping. If almost every order qualifies, raise the threshold. If very few do and AOV hasn’t moved, lower it or make sure you have good add-on products near the gap.