Calculating free shipping rates
Free shipping is a common business and marketing practice that can increase sales and encourage your customers to complete their purchase. Many customers expect free shipping when their order is greater than a specific order value threshold.
You can set up a shipping rate that offers free shipping when the order is greater than a specific value threshold. For example, if you set your free shipping minimum order value to 50 USD, then your customers need to spend at least 50 USD to be eligible for the free shipping.
The free shipping minimum order value is calculated for your store based on your past order values or industry data. The minimum order value threshold is only a suggestion and you can still adjust it based on your business needs.
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Calculating the free shipping minimum order value
The following data is used when the suggested free shipping value is calculated for your store:
- The most common free shipping threshold used by Shopify merchants compared to their orders for the last year.
- The most common free shipping threshold used in each industry.
- Depending on the number of annual sales for your store, the suggested free shipping value is calculated in either of the following ways:
- If your store had more than 50 orders in the last 12 months, then the value of your order is used.
- If your store had fewer than 50 orders in the past 12 months, then the value of orders for your industry is used.
To avoid random free shipping threshold values, the threshold is rounded in the following ways:
- If the threshold is less than 100 USD, then it's rounded to the nearest 5.
- If the threshold is more than 100 USD, then it's rounded to the nearest 10.