What average order value is
Average order value, or AOV, is the average amount of each purchase. It is calculated as: AOV = revenue / number of orders. If a store makes 60,000 euros from 1,000 orders, its AOV is 60 euros.
Together with traffic and conversion rate, it is one of the three variables that explain an ecommerce store’s sales. And it is usually the one that gets the least attention.
Why raising it is so profitable
Every order has fixed costs: the advertising to acquire the customer, picking and packing, shipping and, sometimes, the return. If the customer adds a second product, those costs don’t double, but revenue does go up.
That is why a small increase in AOV has a big effect on margin. And it doesn’t require more traffic or more ad spend.
The levers that work
Not all of them suit every store. It is best to test them one at a time and measure their effect on margin, not just on order value.
- Free shipping above a threshold, set slightly above the current AOV.
- Packs and bundles of products that are used together.
- Recommendations on the product page and in the cart: “complete your purchase” or “customers who bought this also bought”.
- Volume discounts: 2-for-1, second unit or quantity tiers.
- Premium versions of the product (upsell) with the difference clearly explained.
- A gift above a set amount instead of a discount.
What to watch out for
Raising order value at the expense of margin isn’t growth. A badly calculated free-shipping threshold or a 2-for-1 on low-margin products can increase order value and reduce profit.
Nor is it a good idea to fill the product page with offers: if recommendations distract from the main purchase, conversion drops. Ideally, measure AOV, conversion rate and margin per order together.
Real examples
The channel also matters. At Verdecora, the average basket in the app is 24% higher than in other channels: the most loyal customers buy more per order.
And a good platform helps activate these levers without complex development. At Footdistrict, after migrating to Shopify Plus, average order value rose by 5% and orders by 13.6%.
Frequently asked questions
How is average order value calculated?
By dividing revenue for a period by the number of orders in the same period. With 60,000 euros and 1,000 orders, AOV is 60 euros.
Where should the free-shipping threshold be set?
Slightly above the current AOV, so that some customers add one more product. Check that the margin on the extra order covers the shipping cost.
Does raising AOV lower conversion?
It can, if you push too hard or make checkout more complicated. That is why it is best to measure order value, conversion and margin together.
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CMO at Webimpacto. She leads the Growth area: SEO, GEO, paid media, CRO and analytics for brands that sell online.