A free shipping threshold is the minimum order amount required to receive free shipping. "Free shipping on orders over $75" incentivizes customers to add more items to reach the threshold, increasing average order value while managing shipping costs.
Setting the optimal threshold requires balancing customer acquisition (lower threshold = more attractive offer) against profitability (higher threshold = customers cover more shipping cost). The ideal threshold is typically set just above current AOV to encourage add-ons.
Analyzing competitor free shipping thresholds reveals market standards and positioning. Brands offering unconditional free shipping are making a strategic choice to absorb costs for competitive advantage, while high thresholds indicate margin focus.