Free Shipping Threshold Analysis Skill

Quick Start

This skill helps Fulfil merchants determine their most profitable free shipping threshold using their actual order data.

What It Does

Instead of guessing or blindly copying competitors, this skill analyzes your specific business data to recommend:

1. Where your orders naturally cluster - Understanding your order value distribution
2. Your hero products - Products driving the most revenue and their price points
3. Shipping economics - Your actual average shipping costs
4. Smart thresholds to test - Data-backed recommendations with profit protection
5. Thresholds to avoid - Values that would hurt margins or lack sufficient volume

How to Use

Prerequisites

• Access to Fulfil data warehouse via MCP connector
• At least 6 months of order history (minimum 1,000 orders recommended)
• Shipping cost data in your shipments table

Usage

Simply ask Claude:

"Run a free shipping threshold analysis on my order data"

Or more specifically:

"Analyze my order data to recommend the best free shipping threshold. Focus on the last 6 months."

Claude will:
1. Query your sales_orders and shipments tables
2. Analyze order value distribution
3. Identify hero products and their pricing
4. Calculate shipping cost averages
5. Provide threshold recommendations with detailed reasoning

What You'll Get

Executive Summary: Quick overview of findings and recommendations

Order Landscape: Visual breakdown of where your orders cluster by value

Hero Products: Your top revenue drivers and their price points

Threshold Recommendations:
- Specific dollar amounts to test
- Hypothesis for each (what customer behavior it tests)
- Volume and margin analysis
- Risk assessment
- Expected impact calculations

Do Not Test List: Thresholds to avoid with explanations

Next Steps: Testing sequence and success criteria

Key Insights From The Analysis

This analysis is based on Victor Paycro's methodology that emphasizes:

• Data First: Use YOUR data, not industry benchmarks
• Margin Protection: Never test thresholds that include too many low-margin products
• Volume Validation: Only test where customers already spend money
• Hypothesis Framing: Each threshold tests different customer behavior
• Profitability Focus: AOV increases mean nothing if margins erode

Common Scenarios

Scenario 1: DTC Brand with Hero Product at $95

Recommendation: Test $75 and $125
- $75 removes friction on hero purchases
- $125 tests basket expansion behavior
- Skip $40 (margin killer) and $200 (no volume)

Scenario 2: Multi-Product Catalog, Orders Cluster $30-$80

Recommendation: Test $50
- Covers majority of order range
- Above low-margin danger zone
- Reasonable customer expectation

Scenario 3: High AOV Business, Orders $150+

Recommendation: Test $125-$175
- Matches natural customer spending
- Strong margin protection
- Tests incrementality on already-high orders

Data Quality Notes

The analysis automatically:
- Excludes canceled/failed orders
- Filters out shipping line items
- Removes outlier shipping costs
- Validates sufficient data volume
- Alerts if patterns are unclear

When to Re-Run

• Quarterly: Capture seasonal changes
• After Product Launches: New hero products may shift optimal threshold
• Pricing Changes: Hero product price updates affect recommendations
• Shipping Cost Changes: Carrier rate increases impact economics
• Catalog Shifts: Major changes to product mix

Integration Points

This analysis informs:
- Shopify free shipping rule configuration
- Promotion strategy planning
- Pricing optimization initiatives
- Inventory strategy (what to push to hit thresholds)
- Email/SMS marketing campaigns around threshold incentives

Important Caveats

⚠️ This analysis tells you WHERE to test, not WHETHER free shipping will work

• Always A/B test before full rollout
• Monitor conversion rate AND profitability
• Consider different thresholds for different customer segments
• Account for fulfillment complexity (some items cost more to ship)
• Factor in return rates if offering free returns too

Technical Details

• Platform: Runs on Fulfil data warehouse (BigQuery)
• Data Timeframe: Default 6 months, adjustable
• Query Performance: Optimized for large datasets
• Privacy: All data stays in your Fulfil instance

Support

For questions or issues:
1. Check the skill's detailed methodology section
2. Verify data quality in your Fulfil instance
3. Ensure MCP connector is properly configured
4. Review sample queries for customization options

Example Output Preview

EXECUTIVE SUMMARY

Based on your last 6 months of order data:

Order Landscape:
Your orders cluster between $40-$120, with a clear peak at $75-$95 (38% of all orders)

Hero Products:
1. Premium Bundle ($89) - 22% of revenue
2. Starter Kit ($49) - 15% of revenue  
3. Deluxe Package ($129) - 12% of revenue

Shipping Economics:
Avg: $9.25 | Median: $8.50 | Range: $5-$18

RECOMMENDATIONS:

Test #1: $75 Threshold
✓ Tests friction removal on hero product purchases
✓ 42% of orders would qualify
✓ Margin-to-shipping ratio: 7.2:1 (strong protection)
✓ Estimated monthly cost: $3,850
✓ Risk: Low - well above margin danger zone

Test #2: $125 Threshold
✓ Tests basket expansion behavior  
✓ 26% of orders would qualify
✓ Margin-to-shipping ratio: 9.8:1 (excellent protection)
✓ Estimated monthly cost: $2,200
✓ Risk: Medium - depends on add-to-cart behavior

DO NOT TEST:
✗ $40 - Margin-to-shipping ratio only 2.1:1 (margin killer)
✗ $200 - Only 6% of orders (insufficient volume)

Next Steps:
1. A/B test $75 threshold for 2-4 weeks
2. Monitor conversion rate, AOV, and margin dollars
3. If successful, test $125 with existing customers

Version

v1.0 - Based on Victor Paycro's threshold optimization methodology