Free Shipping Threshold Test: $28K/Month Case Study

Free shipping isn't free. Someone pays for it. The question is: at what threshold?

We tested free shipping thresholds for an 8-figure adult wellness brand. The control offered free shipping at $49. We tested raising it to $59 and $75.

The winner? $59. Not too low, not too high.

Results: +6.50% profit per visitor. EST. +$28,939/mo.

The Problem With Arbitrary Thresholds

Most brands set free shipping thresholds based on gut feel or competitor matching. "Amazon does free shipping at $35, so we should be close to that." Or "our average order is $60, so let's set it at $49."

But the optimal threshold depends on your specific customers, your margins, and your shipping costs. A threshold that's too low leaves money on the table. A threshold that's too high kills conversions.

Only testing tells you where the sweet spot is.

The Hypothesis

Testing different shipping price points will help identify the optimal balance between conversion rate and profitability. By finding the price customers are most comfortable paying for shipping, we aim to reduce cart abandonment while maintaining healthy margins.

The goal: find the threshold that maximizes profit per visitor, not just conversion or just AOV.

Test Setup

Component: Free Shipping Threshold
Location: Sitewide
Platform: Intelligems
Test Type: A/B/n with 3 variations

Control: $49 Threshold

Free shipping on orders $49 and above.

Profit per Visitor: $4.09

Low threshold. More customers qualify for free shipping. More shipping costs absorbed by the brand.

Variation 1: $59 Threshold (Winner)

Free shipping on orders $59 and above.

Profit per Visitor: $4.36

Moderate increase. Some customers add more to hit threshold. Some pay for shipping. Better margin overall.

Variation 2: $75 Threshold

Free shipping on orders $75 and above.

Profit per Visitor: $3.97

Higher threshold. Fewer customers qualify. More cart abandonment from customers who won't stretch to $75.

Results

Winner: Variation 1 ($59 Threshold)

Metric	Change
Profit per Visitor	+6.50%
Estimated Monthly Profit	+$28,939

$59 beat both $49 (too generous) and $75 (too aggressive). The optimal threshold was in the middle.

Why It Worked

1. $49 was leaving money on the table

At a $49 threshold, most customers qualified for free shipping without adding anything extra. The brand absorbed shipping costs on nearly every order.

Raising to $59 meant customers had to stretch a bit more. Some added an extra item to qualify. Others paid shipping. Either way, the brand captured more value.

2. $75 pushed too hard

At $75, the threshold was too far from the typical order value. Customers who would have bought at $50-60 faced a choice: add $15-25 more, or pay for shipping.

Many chose neither. They abandoned. Profit per visitor dropped below the control.

There's a point where a higher threshold costs more in lost conversions than it gains in shipping revenue.

3. $59 hit the sweet spot

$59 was high enough to recover more shipping costs, but low enough that customers would stretch to hit it.

The gap from a typical order to the threshold matters. A $10 stretch is easy. A $25 stretch is hard. $59 kept the stretch manageable.

4. The math of shipping thresholds

Free shipping thresholds affect three things:

• Conversion rate: Lower thresholds = higher conversion (less friction)
• AOV: Higher thresholds = higher AOV (customers add to qualify)
• Shipping cost absorption: Lower thresholds = more free shipping given

Profit per visitor captures all three. That's why it's the right metric for threshold tests.

5. Customer behavior has limits

Customers will stretch to hit free shipping, but only so far. The willingness depends on the gap and the product category.

For this brand, $10 stretch was fine. $25+ stretch was too much. Your customers might have different limits.

What This Means for Shipping Strategy

Your free shipping threshold is a profit lever. Test it.

Principles to apply:

• Test above and below current threshold: Find where profit peaks
• Measure profit per visitor: Not just conversion or AOV alone
• Consider your AOV: Threshold should be reachable but require a small stretch
• Account for shipping costs: Know what free shipping actually costs you
• Test periodically: Optimal thresholds can change with product mix and customer behavior

FAQ

How do you choose which thresholds to test?

Start with your current AOV. Test thresholds slightly above it (to encourage upsells) and significantly above it (to find the ceiling).

If your AOV is $55, test $49, $59, $69, $75. Bracket the likely optimal range.

Won't customers hate paying for shipping?

Some will. But if the threshold is reasonable, most will either add more or pay the shipping fee without abandoning entirely.

The $75 threshold showed where customer tolerance ends. $59 stayed within acceptable range.

Should we offer a flat shipping rate below the threshold?

Test it. Some brands do well with "Free shipping over $X, flat $5 under." Others just show calculated shipping.

The key is that below-threshold shipping feels reasonable, not punitive.

Does this apply to all product categories?

The principle applies, but the optimal threshold varies.

High-AOV brands (furniture, electronics) might have $150+ thresholds. Low-AOV brands (accessories, small items) might need $35-50 thresholds.

Test for your specific business.

What about free shipping on all orders?

Some brands do this, building shipping into product prices. It simplifies the experience but eliminates the AOV lever.

If your margins support it and your AOV is already high, unconditional free shipping can work. But for most brands, a threshold drives better profit.

This test was run using Intelligems as part of a CONVERTIBLES personalization program. Want to see what shipping optimization could do for your store? Book a call to get 3 personalized recommendations for your store.