From what cart amount can delivery be free without going below your minimum margin? The average cart, the margin and the real cost of one delivery are enough.
Your cart
Delivery
Free delivery from
34,000 F
of cart incl. VAT
Average cart before tax29,661 F
Gross margin of the average cart10,381 F
Margin after a free delivery8,381 F
Share of the margin eaten by delivery19.3%
Left for you to pay on a charged delivery500 F
Threshold before tax = delivery cost ÷ (gross margin − minimum margin), then VAT added and rounded. Example: replace with your figures.
In Odoo : the threshold is entered on the delivery method ("free if order amount is above"); below it, the fixed price or the rule applies.
The method
What the calculation does.
The cart before tax
35,000 F incl. VAT ÷ 1.18 = 29,661 F, with a 35% gross margin: 10,381 F.
What a delivery costs
2,000 F paid to the rider; below the threshold the customer pays 1,500 F and 500 F is left for you.
The threshold
2,000 ÷ (35% − 28%) = 28,571 F before tax, i.e. 33,714 F incl. VAT, rounded to 34,000 F.
Above the threshold
Every bigger cart keeps at least a 28% margin, delivery paid.