What is AOV?
Average Order Value – the average amount spent per transaction.
How AOV Works
AOV, or Average Order Value, measures the average dollar amount spent each time a customer completes a purchase. It's calculated by dividing total revenue by the number of orders. For example, $10,000 in revenue from 200 orders = $50 AOV.
Increasing AOV is one of three primary levers for revenue growth (along with traffic and conversion rate). Strategies to increase AOV include product bundling, upselling, cross-selling, free shipping thresholds, volume discounts, and payment plan options. Even small AOV improvements compound over time—increasing AOV by 10% while maintaining the same traffic and conversion rate boosts revenue by 10%.
Frequently Asked Questions
What is AOV?
Average Order Value – the average amount spent per transaction.
AOV, or Average Order Value, measures the average dollar amount spent each time a customer completes a purchase. It's calculated by dividing total revenue by the number of orders. For example, $10,000 in revenue from 200 orders = $50 AOV.
What does AOV stand for?
Why is AOV important?
AOV is a critical e-commerce metric because increasing it directly boosts revenue without requiring more traffic or customers. Higher AOV also improves unit economics—fulfillment and transaction costs remain relatively fixed, so larger orders are disproportionately more profitable. AOV optimization is often easier and faster than acquisition optimization, making it a high-leverage growth tactic.
How do you calculate AOV?
AOV = Total Revenue ÷ Number of Orders. For example, if you generated $50,000 in revenue from 1,000 orders, your AOV is $50,000 ÷ 1,000 = $50.00 per order.