Free shipping above what amount? The calculation that decides
Photo: Avila Ops Tecnologia
The free shipping minimum comes from three of your numbers: average order value, average shipping cost you pay, and margin per order. The rule that works for most small stores is setting the minimum slightly above average order value so customers must add an item to earn free shipping, and checking that the larger order’s margin covers the shipping you absorb.
Poorly calculated free shipping makes you sell more and earn less. Calculated well, it turns a R$ 120 customer into a R$ 160 customer. The calculation takes ten minutes. The figures below are illustrative; replace them with yours.
Which three numbers do you need?
Photo: Avila Ops Tecnologia
Take the last 60 days’ orders and calculate:
- Average order value: total sales divided by orders. Example: R$ 130.
- Average shipping paid: total shipping label cost divided by shipments. Example: R$ 24. Without history, get Correios quotes for three ZIP codes (a nearby capital, a distant capital, an inland destination) using your most common box and average them.
- Margin per order: price minus product cost, payment processor fees, and tax on the average order. Example: 40% of R$ 130, or R$ 52.
With these three, the question becomes: at what order value does margin pay for shipping and still leave an acceptable amount?
How do you calculate it?
| Step | Calculation | Result |
|---|---|---|
| Shipping you absorb | Average shipping | R$ 24 |
| Minimum margin you want to keep per order | Your choice; say R$ 40 | R$ 40 |
| Required margin | R$ 24 + R$ 40 | R$ 64 |
| Order value generating that margin | R$ 64 divided by 40% | R$ 160 |
| Free shipping minimum | Round upward | R$ 169 |
The R$ 169 minimum exceeds the R$ 130 average order. Customers planning to spend R$ 130 must add R$ 39 in products to avoid R$ 24 shipping. Many do. Those who do not pay actual shipping, and you absorb nothing.
If the calculated minimum is far above average order value (double, for example), free shipping will not motivate anyone. Then offer it only for certain regions (the cheapest for you), or offer reduced flat-rate shipping instead.
What are the most common mistakes?
- Minimum below average order value. You give free shipping to people who would already buy without changing anyone’s behavior.
- Free shipping across Brazil based on a national average. Distant customers cost twice as much as nearby ones. Calculate the average using your actual destinations, or restrict by region; the shipping calculation by ZIP code guide explains destination differences.
- Forgetting packaging and time. The label is not the entire shipping cost; see what shipping is and who pays for what.
- Never reviewing. Correios adjusts rates, your product mix changes, average order value changes. Recalculate every three months.
How do you test without risking the month?
Enable free shipping at the calculated minimum for two weeks and track three numbers: average order value, the percentage reaching the minimum, and total shipping absorbed. If average order value rose and absorbed shipping fit within margin, keep it. If average order value did not change, the minimum is too high or customers could not find something to add; show “R$ X more for free shipping” in the cart and suggest inexpensive products.
An alternative with zero shipping cost for nearby customers is store pickup, covered in store pickup: shipping that costs nothing and brings people to your door.
What to do now
Open your orders spreadsheet, get the three numbers, and run the table’s calculation with your values. Set the store’s minimum and the “R$ X more” notice in the cart. A store live in one day, with ZIP-code shipping, free shipping above a minimum, and no sales commission: avilaops.com/loja-virtual or contact us on WhatsApp: wa.me/5517997811471.
Frequently asked questions
Does free shipping increase sales?
It increases order value when the minimum sits slightly above average order value. It does not increase customer count by itself. Measure average order value before and after to learn whether it worked in your store.
Can I offer free shipping only in my city?
Yes, and it is usually the best starting point. Cost is known and low, and local customers return most often. Combine it with store pickup.
Which is better: free shipping or a product discount?
For customers, free shipping usually matters more than an equal-value discount. For you, shipping costs vary by ZIP code while discounts are fixed. With high average shipping, use free shipping above a minimum; with low shipping, use a discount with a minimum order.
Connections, made clear
Every delivery has a journey to follow.
Explore a transport operation and its review points.
- RequestGather collection or delivery details.
- PlanningOrganise the stops and responsibilities.
- DispatchCheck the load and record its departure.
- TrackingMonitor updates and possible incidents.
- CompletionReview the delivery and operation records.
- Request. Gather collection or delivery details.
- Planning. Organise the stops and responsibilities.
- Dispatch. Check the load and record its departure.
- Tracking. Monitor updates and possible incidents.
- Completion. Review the delivery and operation records.
Request
Gather collection or delivery details.
Turn what you learned into your next step.
Tell us about your company and what you want to improve. We can explore the right tools, integrations or custom project together.