Shopify Free Shipping Threshold: A Comprehensive Guide
Every customer loves free shipping! Although free shipping thresholds are an incredibly effective method of increasing AOV, they are also expensive. Therefore, getting your Shopify free shipping threshold right is a big deal: what amount should the threshold be and what factors should be considered to determine that threshold?
Free Shipping Threshold Analysis identifies the sweet spot where customers are motivated to spend a little more to qualify for free shipping, without making it so high that they abandon the purchase altogether. Let's take a look at your Shopify data and see if your free shipping threshold is set too low, too high, or just right!
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Transforming data into actionable insightsRetentionX- Shopify
5.0Revenue ImpactHighImplementation10 min
By default, this analysis looks at all transactions in the last 6 months. For this dataset, we first calculate the median order value to determine your customers' typical purchasing behavior.
Based on this median order value, RetentionX suggests where to set your free shipping threshold. This value is set just high enough that your customers will spend more than they normally do to receive the offer, but not so high that the customer feels the threshold is not worth reaching.
If your free shipping threshold is set too low, you will see a large number of orders at and above your threshold. Your data may look like this:
In this case, there are a large number of orders before the threshold that qualify for free shipping. This means you're giving away free shipping too cheaply, so a large number of your customers have no motivation to take advantage of it.
👉 Solution: Raise your shipping threshold to the one we suggest. This is a potentially unpopular move, but one that could have a big impact on your bottom line.
If your free shipping threshold is set too high, you will see a large number of orders at and before your threshold. Your data may look like this:
Implementing a free shipping threshold that is too far away from the median order value can ultimately drive customers away because they value free shipping and are not encouraged to add additional items to their cart to qualify.
👉 Solution: Lower the free shipping threshold, which should result in a significant increase in order values.
If your free shipping threshold is set just right, you will see a dip between the highest order and the threshold, but it will be a small dip
Free shipping threshold analysis is just one of hundreds of optimization opportunities for your brand. You can have RetentionX up and running on Shopify in minutes:
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Transforming data into actionable insightsRetentionX
- Shopify
5.0Revenue ImpactHighImplementation10 min