Ecommerce shipping economics
Free shipping, with a margin floor.
Find the order value needed for product contribution to absorb average shipping and still leave your chosen contribution dollars.
Threshold = (average shipping cost + target contribution) ÷ contribution-margin rate. This is a unit-economics threshold, not a conversion or average-order-value forecast.
Threshold inputs
Profitability floor
Method and limits
Shopify supports price- and weight-based free-shipping conditions and notes that the business still pays fulfillment and carrier costs. The calculator treats contribution margin as the percentage of order revenue left after the variable costs you already included, before shipping. It does not estimate customer response, carrier zones, dimensional charges or tax.
Official sources, checked 15 October 2026: Shopify Help: Shipping rates and Shopify: Free shipping strategies, updated 26 September 2026.