Free Shipping or 10% Off? Compare Your Holiday Offer Guide

Hold the basket and costs constant

Use one basket of goods for all scenarios. Start with a fictional $60 goods price, $36 product cost, $2 pick-and-pack cost, $5 delivery cost paid by the business and $5 shipping charged to the customer. Assume a payment fee of 3% of goods plus charged shipping, plus $0.30.

The Order Contribution tool can represent this basket as one unit priced at $60 with $36 product cost. With no discount, $65 is collected, payment fees are $2.25 and contribution after these entered costs is $19.75. Taxes, advertising, overhead and returns are excluded here.

Compare two offers on that same order

For free shipping, leave goods at $60 and set customer shipping charged to zero. Keep business-paid delivery at $5. Collected revenue is $60, payment fees are $2.10 and contribution is $14.90. Free shipping reduces this basket's modeled contribution by $4.85 from baseline.

For 10% off goods, collect $54 goods plus the original $5 customer shipping. Payment fees on $59 are $2.07. Contribution is $59 − $36 − $2 − $5 − $2.07 = $13.93, down $5.82 from baseline. Under these particular inputs, free shipping retains $0.97 more contribution per identical basket.

Calculate the volume needed without predicting demand

One hundred baseline orders at $19.75 contribute $1,975. With no extra campaign cost and the same order mix, preserving that amount requires ceiling($1,975 ÷ $14.90) = 133 free-shipping orders, or ceiling($1,975 ÷ $13.93) = 142 discounted orders. Sufficient whole-order counts do not establish that customers will place them.

The Promotion Discount tool assumes unchanged variable cost per unit; payment fees that change with the selling price need a consistent cost boundary. The Free Shipping Threshold tool assumes a stable product contribution percentage and flat fulfillment costs. Use each model's stated inputs rather than copying unlike profit figures between tools.

Measure the packed gift box before buying a label

A light package can still have a higher dimensional weight. As a fictional rating example, a 40 × 30 × 20 cm carton has dimensional weight 4.8 kg at a user-selected divisor of 5,000 cm³/kg. At a chosen 1 kg rounding increment, that becomes 5 kg. If actual weight is 2 kg, the larger weight determines the modeled billable result.

A 30 × 25 × 20 cm carton under those same illustrative terms has 3 kg dimensional weight. A smaller box may change the rating basis, but the tool does not quote a shipping price, establish protective suitability or promise delivery by Christmas. Use your actual carrier's divisor, measurement rounding and contract terms.

Review returns after Christmas on their own assumptions

Keep original delivery and payment costs in the return scenario. Enter the refund amount, extra handling, recoverable inventory cost and any actual processing-fee refund terms. Inventory returned to usable stock is economic recovery, not immediate cash or a guaranteed resale.

For a batch of 100 fictional orders collecting $100 each, with $40 product cost, $10 outbound cost and 3% plus $0.30 payment fees, no-return contribution is $4,670. At a hypothetical 10% return rate, full $100 refunds, $8 handling and 80% product-cost recovery with no fee refund, it becomes $3,910. These are scenario inputs, not a market return-rate forecast.

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