What is AOV (Average Order Value)?
Average Order Value (AOV) is the average dollar amount spent each time a customer places an order. It’s one of the three fundamental levers for increasing revenue (alongside traffic and conversion rate).
Why It Matters
Increasing AOV is often the fastest path to profitability. Unlike acquiring new customers (which costs money), getting existing shoppers to add more to their cart is nearly pure margin.
How to Calculate It
AOV = Total Revenue ÷ Number of Orders
Strategies to Increase AOV
- Bundling: Offer curated product bundles at a slight discount
- Free shipping thresholds: Set them just above your current AOV
- Upsells and cross-sells: Recommend complementary products at checkout
- Tiered pricing: Offer volume discounts for larger orders
- Gift-with-purchase: Add a free item on orders above a threshold
AOV Best Practices
Don’t optimize AOV in isolation. An upsell that increases AOV but decreases conversion rate may net negative. Always measure AOV alongside conversion rate and overall revenue per visitor.