What is AOV (Average Order Value)?

Average Order Value (AOV) is an e-commerce metric that measures the average total of every order placed with a merchant over a defined period of time. It is one of the most important metrics for online stores to be aware of, driving key business decisions such as advertising spend, store layout, and product pricing.

How to Calculate AOV

The formula for calculating AOV is simple:

Example: If your store had sales of $10,000 from 200 orders in a month:
$10,000 / 200 = $50 AOV

Why AOV Matters

Increasing your AOV is often the easiest and cheapest way to increase revenue because you are extracting more value from the customers you already have, rather than paying to acquire new ones.

Strategies to Increase AOV

• Upselling: Suggesting a more expensive version of the product the customer is buying.
• Cross-selling: Suggesting complementary products (e.g., batteries with a toy).
• Volume Discounts: Offering a discount if the customer buys multiple items (e.g., "Buy 2, Get 10% Off").
• Free Shipping Thresholds: "Spend $50 to unlock Free Shipping."
• Bundling: Grouping products together for a slightly lower price than buying them individually.