How this calculator works
Base threshold = shipping cost ÷ gross margin rate. Suggested threshold is the greater of current AOV and the buffered base threshold.
Worked example
At 45% gross margin, $7.50 shipping requires $16.67 in revenue to recover. With a $45 AOV, a 10% buffer suggests a $49.50 threshold.
How to measure
- Use contribution margin before shipping, not markup.
- Average shipping cost across representative orders.
- Review how the threshold changes order composition.
Common mistakes
- Using markup percentage as gross margin.
- Ignoring remote-area or oversized orders.
- Assuming the threshold guarantees profit on every basket.
Planning note: This result is an estimate, not a carrier quote. Equipment, services, limits and rounding rules can vary. Confirm operational decisions with the relevant provider.