blog · May 23, 2026

Should I charge for shipping or offer free shipping?

Free shipping above an AOV threshold beats both pure-free shipping and flat-rate shipping in 90% of DTC categories. The threshold is the lever, not the existence of free shipping.

Pure free shipping is a margin trap

Brands that ship free on all orders subsidize $4-8 of shipping per low-AOV order out of margin. On a $25 AOV, that's 16-32% of gross — gone before you've paid for the ad that drove the click.

Threshold shipping juices AOV

The pattern that works: free shipping above 1.4-1.6x your current AOV. If your AOV is $42, set the threshold at $59. Customers add a $19 product to qualify, your AOV rises 35%+, your shipping cost shrinks per dollar of revenue, your CAC payback improves.

Brands that move from no-threshold to threshold see 20-40% AOV lift within 30 days.

Flat-rate is for high-AOV brands

If your AOV is >$150 and customers have already accepted the price point, a $9.95 flat rate is fine. Customers don't bail on a $200 order over $10 shipping. They do on a $40 order. Match the model to the AOV bracket.

Want to try the free tool? Get your 3 free ad creatives →