Free Shipping Threshold
"Free shipping on orders over $75!" — you've seen it everywhere. It works great for boosting AOV, but you're still paying the carrier. "Free shipping" really means "I'll eat the shipping cost and hope the larger order covers it."
Example
You set a $75 threshold. Shipping costs you $8 per order. Your product margin is 35%. That means the first $22.86 in profit from that order just went to cover shipping. The customer only needs to clear $75 for it to start being worth it
Why It Matters
Setting a free shipping threshold too low kills your margin. Too high and customers abandon their cart. The sweet spot is typically 1.2-1.5x your AOV — high enough to encourage upsells, low enough that customers actually reach it.
Pro Tip
Set your free shipping threshold at 1.3x your current AOV. Monitor for 30 days — you should see AOV increase by 10-15%.
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