Should You Offer Free Shipping? A Simple Test to Decide.

From a consumer’s perspective, there’s something inherently appealing about the term free shipping. The mere thought of getting something for free is often enough to put a smile on most people’s face. Unfortunately, what’s good for the consumer isn’t always best for the merchant.

The effectiveness of free shipping as a sales incentive is often supported by statistics: ComScore, a leading digital market intelligence agency, found that 72% of online customers prefer free shipping. Impressive, right? Well, not so fast. Although free shipping is preferred by consumers, in some cases it’s ultimately ill-advised.

We teamed up with our friends at ShivarWeb and put together a genius little tool that will help determine the costs of free shipping on your profit margins.

Use Free Tool

ShivarWeb has also put together an awesome blog post entitled The Profitable Guide to Free Online Shipping for Ecommerce Stores that outlines everything you need to know about free shipping vs. paid shipping.


  • Stuart Henry
    Stuart Henry
    March 29 2011, 04:56PM

    Great tool, looks very helpful.

    Any plans to build free shipping (by product or collection) into Shopify?

  • Marla
    March 29 2011, 04:56PM

    Sweet guys! Thanks. Will take the app for a spin, but at first glance it looks to be promising and should help alot of us e-tailers who grapple with the decision to go with free shipping.

  • Forrest
    March 29 2011, 04:56PM

    Thanks.. Very helpful for new shop owners..

  • Gemma
    March 29 2011, 04:56PM

    This is a really neat tool and has helped me with a decision I’ve been struggling with for a while.

    Thanks Shopify!

  • Gerhard Vana
    Gerhard Vana
    March 29 2011, 04:56PM

    Hey Guys,

    Thanks for the great feedback. It’s critical for any store to consider – and measure – any decision that affects their bottom line. Especially shipping!

    The people @ Shopify were great at helping us put this together and focus on the important stuff, so a BIG thank you goes out to them :)


  • Chris Patton
    Chris Patton
    March 29 2011, 04:56PM

    Shopify – interesting tool, but until there is a real option in shopify to offer free shipping (instead of a discount code workaround), this is just a frustrating exercise. Please Please Please realize that when Amazon has free shipping, your customers need to offer it as well.

    MarketBrain – cool tool, what would help on the 2nd tab is a button that people can click on to automatically calculate the breakeven point (in terms of % of sales increase needed to make free shipping worthwhile.)


  • Horny Goat Weed
    Horny Goat Weed
    March 29 2011, 04:56PM

    Offering free shipping is great, but only if you can absorb into the product price i.e. if I was to give free shipping (which I have in the past) then one has to accrue that into the product cost, which is easily doable, but sometimes it can make your initial product cost seem off-put-tingly high to consumers depending on what market you are in.

    But there are ways around it e.g. the good old spend more than X amount and get free shipping :)

  • Gerhard Vana
    Gerhard Vana
    March 29 2011, 04:56PM

    Hey Chris,

    Good idea! I’ll look at adding that in the near future!


  • Gerhard Vana
    Gerhard Vana
    March 29 2011, 04:56PM

    @HGW Exactly! There’s various ways to do it, including bumping up product prices.

    The Spend X method is especially effective at upping your avg. order value, so if you look at the bottom of my post you’ll see how you can best calculate that magic X number.

    Gerhard – MarketBrain

  • tim
    March 29 2011, 04:56PM

    I think you should spend time adding features to Shopify instead of adding graphics to an excel spreadsheet.

    I can manage my own spreadsheets. I can manage my own business decisions.

    I cannot manage adding a method by which I can send a customer a free shipping coupon to use in my Shopify store.

  • Milwaukee SEO
    Milwaukee SEO
    March 29 2011, 04:56PM

    Thanks for the heads up on the app…I will be sure to look at it. In regards to “free shipping” I have found it to be the deciding factor for many consumers. It is not cost-effective to do it for every purchase unless you get a ridiculous volume discount from the shipper, however for first time customers it works great!

  • Gerhard Vana
    Gerhard Vana
    March 29 2011, 04:56PM

    @Milwaukee: Indeed. Its very much dependent on your type of products and profit margins too. No use selling if it’s costing you more than it’s worth :)

    @Tim: I think I need to point out that this was not done by Shopify, but by me, a 3rd party app developer. And I’m glad that you’re proficient at Excel, but many people aren’t. I did this to help them.

  • suhana
    April 09 2013, 09:04AM

    Today i came across this amazing new website named…i really think you guys should check it out..

  • Filplastic
    June 14 2013, 10:27AM

    Yup – Free shipping PER product rather than at cart is a MUST for us, as some products don’t have shipping and some do, not mweight based, makes a massive differnce to be able to have a tick box per product to allow shipping to calculate or not.

  • Caitlin
    May 08 2014, 07:32PM

    Another FedEx Rate Hike…Here is what you can do about it.
    FedEx just announced it is raising prices by about 41% for one-third of their ground shipments. They’re doing this by charging for “box size” instead of “weight”. See article:

    Who is impacted and what can they do about it?
    Lighter weight products requiring a larger size box will cost more to ship. Product examples are diapers, paper towels, shoes, light toys, promotional materials, bulky household goods, fragile items requiring padded packaging, and many others. This increase will dramatically affect online retailers and small businesses the most. Merchants will have to choose to either raise product prices (sales will decrease), pass on shipping fees (cart abandonment will increase), or absorb the fee entirely (not competitive long-term).

    Is there a good option?
    Yes. While FedEx is raising rates, has lowered the price of shipping via USPS 2-Day Priority Mail with an innovative New Blue program now available at The company already saves shippers about 20% from their previous bills with FedEx or UPS by giving them access to pricing designed to compete with market leaders such as Amazon. By offering 2-day service for less than FEDEX 5-day ground, users retain more profit and provide a better transit experience to their customers. If you’re still shipping with FedEx or UPS, contact us for a free shipping analysis. We’re here to help.

  • Tracy
    May 26 2014, 11:00PM

    Hey Shopify!
    Great article although it seems the website hosting the Shipster App is no longer functioning – I’d love to use the tool in realtime and wondered if it’s hosted anywhere else?

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