Free Shipping Profit Calculator

How to use this calculator

1. Enter your numbers in each field above — the calculator updates instantly as you type, so there's nothing to submit.
2. Use your real figures when you have them, or sensible estimates while you're planning. If a field doesn't apply, leave it at zero.
3. Compare the results, then change one input at a time to see how each lever (price, cost, fees, volume) moves the outcome.

When to use this calculator

• Before offering free shipping, so you know whether it needs to be built into the item price.
• When postage rates rise and your current free-shipping threshold stops working.
• When comparing a flat shipping charge against a free-shipping price bump.
• Before a promotion where free shipping is the main offer.

Formula

Paid: Profit = Price + Charged − Cost − Packaging − Ship − Fees. Free: Profit = Price − Cost − Packaging − Ship − Fees. Break-even free-shipping price = (Cost + Packaging + Ship + Fixed + Desired profit) ÷ (1 − Fee%)

Worked example

$25 price, $6 actual shipping, $5 charged, $8 cost, $1 packaging, 10% + $0.30.

1. Paid: revenue $30, fees $3.30, profit $11.70
2. Free: revenue $25, fees $2.80, profit $8.20
3. Difference = −$3.50

Answer: Free shipping earns $3.50 less at this price

How it works

Expert tips

• Use the safe free-shipping price as a floor, then round up to a normal-looking price point.
• Apply free shipping to your higher-priced items first — margin there can absorb postage.
• Check your heaviest and furthest-shipping order, not the average one, before going flat-rate.
• Bundles make free shipping much easier: one label spread over several items.

How to interpret your results

• Dollar values are shown per sale, per order, or per item unless a result is explicitly labelled monthly, weekly, or daily.
• Percentages (margin, ROI, conversion rate) are easier to compare across products and price points than raw dollars — use them when you benchmark.
• A positive result means you're ahead after the costs and fees you entered. A negative result means the current numbers don't work — change a lever (raise price, cut a cost, lower ad spend) and recalculate.
• Treat the output as a planning estimate, not a guarantee. Fees, taxes, and conversion rates shift over time — re-run the numbers whenever a key input changes.

Common mistakes

• Assuming free shipping only costs the shipping label — the fee % is charged on a lower total too.
• Offering free shipping on your lowest-priced items where margin is thinnest.
• Not accounting for higher-cost shipping regions in a flat-rate model.

Related Guides

Go deeper with plain-English guides on the same topic.

• What Is a Good Profit Margin?

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• What Is A Good Profit Margin? Complete Small Business Profit Margin Guide

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• How to Price Handmade Products

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FAQ

Should I offer free shipping?

Only if the price absorbs the cost with margin to spare. Use the 'price for safe free shipping' output as your floor.

What about international orders?

Never offer flat free shipping internationally without a per-region check — one order can wipe out ten domestic profits.

What numbers do I need?

Item price, what you currently charge for shipping, what postage actually costs you, packaging, and your fee percentage plus fixed fee.

Should I raise the item price to cover shipping?

Usually yes. Building postage into the price keeps margin intact while the listing still says free shipping, which is what buyers respond to.

Why do fees change when shipping becomes free?

Platform fees are charged on the order total. Removing a shipping charge lowers that total, so fees fall a little — but not by as much as the postage you absorbed.

Does free shipping actually increase sales?

Often, especially on marketplaces that favour it. Use this calculator to check what the conversion lift has to be worth before it pays for itself.

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