How to Offer Free Shipping on Shopify Without Losing Money (2026 Guide)
Learn the exact formulas and strategies to offer free shipping on your Shopify store while maintaining healthy profit margins. Real math, real results.
The Free Shipping Paradox: Why It Works But Feels Scary
Free shipping is the #1 driver of purchase decisions—92% of shoppers say it influences where they buy. But for Shopify store owners, "free" shipping isn't actually free. Someone has to pay.
The good news? With the right strategy, you can offer free shipping AND increase your profits.
The Math Behind Profitable Free Shipping
Let's break down the numbers with a real example:
Current Scenario (Charging for Shipping):
- Product price: $35
- Shipping charged: $7.99
- Actual shipping cost: $6.50
- Product cost: $12
- Profit: $24.49
- Conversion rate: 2.1%
- Product price: $42
- Shipping charged: $0 (FREE!)
- Actual shipping cost: $6.50
- Product cost: $12
- Profit: $23.50
- Conversion rate: 3.4% (+62%)
Strategy 1: Build Shipping Into Product Prices
The simplest approach—add your average shipping cost to all product prices.
How to calculate:
Shopify Implementation:
Products → Edit prices → Add $7-10 per item
Shipping Settings → Set all rates to $0
Strategy 2: Free Shipping Threshold
"Free shipping on orders over $50" is proven to increase average order value (AOV).
| Threshold | AOV Increase | Best For |
|---|---|---|
| $35 | +12% | Low-priced items |
| $50 | +18% | Mid-range products |
| $75 | +25% | Premium products |
| $100 | +32% | Luxury items |
Strategy 3: Use Cheaper Carriers (The Secret Weapon)
Most Shopify merchants overpay for shipping by 30-40%. Here's what you should actually pay:
| Package | USPS Retail | Shopify Shipping | Atoship Rate |
|---|---|---|---|
| 1 lb Priority | $9.35 | $7.90 | $6.82 |
| 2 lb Ground | $8.50 | $7.20 | $5.45 |
| 4 oz First Class | $4.50 | $3.80 | $3.12 |
Strategy 4: Zone-Based Pricing (Advanced)
If most customers are in specific regions, optimize for them:
Real Results: Case Study
Before (Standard Shipping):
- Monthly revenue: $24,500
- AOV: $45
- Conversion: 2.1%
- Shipping revenue: $3,200
- Shipping costs: $2,800
- Net from shipping: +$400
- Monthly revenue: $38,200 (+56%)
- AOV: $62 (+38%)
- Conversion: 3.1% (+48%)
- Shipping revenue: $0
- Shipping costs: $4,100
- Net from shipping: -$4,100
- But total profit increased by $8,700/month
Implementation Checklist
☐ Calculate your average shipping cost ☐ Sign up for Atoship to get discounted rates ☐ Choose your strategy (built-in, threshold, or hybrid) ☐ Update product prices if needed ☐ Configure Shopify shipping settings ☐ Update marketing to highlight free shipping ☐ Monitor conversion rates for 30 days
The Bottom Line
Free shipping isn't about eating costs—it's about smart pricing and using the right shipping partners. With Atoship's discounted USPS and UPS rates, offering free shipping becomes much more affordable.
Ready to make free shipping profitable? Start with Atoship's free shipping calculator to see your potential savings.
Ready to save on shipping?
Get started with Atoship for free and access discounted USPS, UPS, and FedEx rates. No monthly fees, no contracts.
Create Free Account
