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Ecommerce & content Definition

Average order value AOV

Average order value (AOV) is the average amount customers spend each time they place an order: total revenue divided by the number of orders.

Abbreviation
AOV
Also called
average basket size
Category
Ecommerce & content
Updated
Sheet
4 of 40

Formula

AOV equals revenue divided by orders
Revenue
Total sales from orders in the period, before returns are netted out unless you say otherwise.
Orders
The number of completed orders, not the number of customers.

Worked6,00,000 ÷ 800 = 750

Worked example

D2C candles

A Shopify store selling candles takes 6,00,000 in a month across 800 orders, so its AOV is 750. It adds a free-shipping threshold at 999. A month later it has 800 orders at an AOV of 900, which is 1,20,000 more revenue from the same traffic.

Why it matters

AOV decides how much you can afford to spend to win an order. If the average basket is 750 and margin is 40 percent, you earn 300 per order, and your ad cost has to sit well below that. Lift AOV to 900 and the same order now earns 360, which lets you bid more for the same customer.

It is also the cheapest growth available to an online store. Getting a visitor to add one more item costs nothing; getting a new visitor costs money.

How to improve it

  • Set a free-shipping threshold slightly above your current AOV. Customers add an item to reach it.
  • Bundle. Offer a set at a small saving over buying the pieces apart.
  • Recommend at the right moment: complementary items on the product page and in the cart, not a wall of unrelated suggestions.
  • Tier your pricing, so a larger pack looks like the sensible choice.
  • Follow up by email or WhatsApp with items that go with what was bought.

Common mistakes

  • Raising AOV by hurting conversion. Aggressive upsells can lower the number of orders by more than they lift each one. Watch revenue per visitor, not AOV alone.
  • Using the average when one big order skews it. Look at the median too.
  • Ignoring margin. A discounted bundle can raise AOV and cut profit.
  • Reading AOV without customer lifetime value, which shows whether the larger first basket brings people back.

Sources

  1. Analytics dimensions and metricsGoogle Analytics Help · 2026

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