Comparison
Shipping policy is a pricing decision wearing a logistics costume. A free shipping threshold moves the cost into the product margin and asks the shopper to spend more to avoid it. A flat rate keeps the charge visible and predictable, and leaves margin where it is. Both can work. What decides it is your average order value, the weight and size of what you send, and how far your parcels usually travel.
By CartKernel · Last reviewed 2026-09-07
Option A
Shipping is included once the cart passes a stated amount, so the cost is absorbed into margin and the threshold becomes a target the shopper works toward.
Best for
Option B
A single stated charge regardless of cart contents, simple to communicate and simple to reason about, with the delivery cost sitting outside the product price.
Best for
Side by side
| Criterion | Free shipping threshold | Flat-rate shipping |
|---|---|---|
| What the shopper sees | A target to reach, then no charge | One predictable charge, always the same |
| Where the cost sits | Absorbed into product margin | Charged separately at checkout |
| Effect on order value | Encourages adding items to qualify | Neutral, though bundles still help |
| Margin risk | Rises if most carts barely clear the line | Contained, if the rate reflects real cost |
| Heavy items | Difficult unless the threshold accounts for them | Handles weight and size more honestly |
| Regional variation | Hidden, and averaged across destinations | Can be set per zone |
| Communication | Needs progress messaging to work | Explains itself in one line |
| Returns exposure | Higher on carts padded to qualify | Lower, with fewer filler items |
Unexpected delivery costs at checkout are among the most common reasons carts are abandoned, which is why free shipping is so widely used. But the cost does not disappear. It moves into product margin, and if the threshold is set from a competitor's website rather than your own numbers, the store can win the cart and lose the order.
A flat rate keeps the arithmetic visible. Every order carries a known contribution toward delivery, and margin per order stays predictable, which matters most when items are heavy, bulky or shipped long distances.
The common failure with both is late disclosure. Whichever policy you run, state it where the shopper first looks, on the product page and in the cart, not on the final checkout step. A predictable charge shown early costs fewer orders than a smaller charge that appears at the end.
Start with your current average order value and your contribution margin per order. A threshold sensibly above the current average gives shoppers a reason to add something, while a threshold at or below it simply gives away delivery on orders that would have happened anyway.
Then model the two outcomes that matter. Carts that would have been below the line and now reach it, where you gain revenue and pay for delivery. Carts that were already above it, where you pay for delivery and gain nothing. Multiply each by your real average delivery cost, not the cheapest label you have ever bought, and include the cost of returns on the items people add to qualify.
Run it as a change with a before and after period rather than a permanent decision. Watch average order value, orders per week, contribution margin after shipping and return rate together. A threshold that raises order value while margin per order falls has moved money, not made it.
Many stores end up with neither pure option. A threshold for standard delivery, a flat rate below it, and a surcharge or separate rate for oversized items keeps the promise simple for most orders while protecting the ones that genuinely cost more to send.
Regional rates are the other common adjustment. Delivery within a metropolitan area and delivery to a remote address are different products, and averaging them across a single national threshold means one group is subsidising the other. Shopify, WooCommerce and BigCommerce all support zone-based rates, so the segmentation is a configuration question rather than a development one.
Whatever mix you choose, make sure the rules match what you submit in your product data. Shipping settings in Merchant Center and shipping values in the feed both need to reflect the live policy, otherwise shoppers see one figure in a listing and another at checkout, which costs more trust than the shipping charge ever saves.
The honest bottom line
Free shipping above a threshold suits stores selling light, compact products where adding one more item is natural and margin can carry delivery on larger carts. Flat-rate shipping suits heavy or bulky goods, wide price ranges and thin margins, and it has the advantage of being easy to explain and easy to forecast. Most stores land on a blend: a threshold that sits meaningfully above today's average order value, a clear flat rate below it, and separate treatment for oversized items and distant regions. Set the numbers from your own margin and delivery costs, disclose them early, and review the policy whenever carrier rates change.
We will tell you which fits, with your numbers.
Take your current average order value and set the line above it by enough that a shopper adds a genuine item rather than a token one, then check the result against contribution margin after real delivery costs. Test it for a defined period and watch order value, order count and margin together before making it permanent.
Yes, and most do. A flat rate applies below the threshold and delivery is included above it. That combination keeps the message simple, protects margin on small orders, and still gives shoppers a reason to build a larger cart.
You are paying for delivery on almost all of it, which usually means the line is too low. Either raise it toward the new average order value or fold part of the delivery cost into product pricing deliberately, rather than letting it erode margin quietly.
On the product page and in the cart, in plain terms, along with the delivery window. Progress messaging that shows how much more is needed to qualify belongs in the cart drawer. The aim is that nothing about delivery is new information at the payment step.
A free Growth Analysis ranks what your store should fix first, by revenue at stake.