Example: If you earned $20,000 from 400 orders, your average order value is $50.
Why Average Order Value (AOV) matters
AOV is one of the three levers of ecommerce revenue, along with traffic and conversion rate. Raising it means each visitor or customer is worth more, which also makes advertising more profitable because the same ad spend returns more revenue.
It is closely tied to return on ad spend. If AOV rises while ad costs stay the same, ROAS rises with it.
How to read it
There is no universal target. AOV depends on your products and pricing, so compare it with your own history and by channel, product and customer type.
An increase is not always good news. A higher AOV with falling order counts can mean that small buyers are leaving, so read it next to conversion rate and total revenue.
How to improve it
- Offer bundles and related products at the point of purchase.
- Set a free shipping threshold slightly above your current average order.
- Introduce tiered pricing or volume discounts.
- Recommend upgrades or add-ons during checkout.
Common mistakes
- Including refunded or cancelled orders in the revenue figure.
- Using the average when a few very large orders skew it, instead of also checking the median.
- Pushing AOV so hard that conversion rate drops.
- Comparing periods with very different promotions.
“What was my average order value by month this year, and which products drive the largest orders?”
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