Average Order Value (AOV) refers to the average amount of money a customer spends in a single purchase. It’s a key ecommerce metric that helps you evaluate purchasing behavior and revenue performance per transaction.
To calculate AOV, divide the total revenue by the number of orders over a set period. This gives you the average revenue generated per order.
AOV = Total Revenue ÷ Total Number of Orders
AOV = Total Revenue ÷ Total Number of Orders
If your store earned $20,000 from 500 orders in one month, your AOV would be $40. That means, on average, each customer spent $40 per order.
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A good AOV depends on your industry, but increasing it over time generally reflects better pricing strategies and customer engagement. AOV should always grow faster than your cost per order.
A consistently low AOV may indicate missed opportunities in cross-selling, underpriced products, or poor user experience. This can limit revenue growth even if traffic is strong.
Group related products together to encourage customers to buy more at once and raise their total spend.
Set a minimum spend for free shipping to incentivize higher-value purchases.
Suggest upgrades or add-ons during the checkout process to increase the average order size.
