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AOV

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AOV, or Average Order Value, is a key eCommerce metric that shows the average amount spent per order.

AOV meaning is the average order value, and its one of the most important metrics for e-commerce business decisions such as advertising spending, expenses, store layout, and product pricing.

When one customer comes to visit your website and purchases something, but in the same order, they include multiple products to buy, then your Average Order Value automatically increases.

Essentially, the AOV may provide some insights regarding customer behavior while purchasing. For example, a lower AOV indicates that the customers prefer to make small purchases with each order on your website.

How to calculate AOV?

To calculate your business AOV, the simple AOV formula is that AOV is equal to revenue divided by the number of orders.

Average order value(AOV) = Total revenue / Number of orders

With this AOV formula, you can get an idea about your business. AOV is determined using sales per order, not sales per customer, which means one customer may come back multiple times to make a purchase, but each order AOV is calculated separately.

Author
Published
November 22, 2023
Updated
November 21, 2024

Frequently Asked Questions

It depends on the price, anything more than US $285 puts good AOV in 20% of stores, and more than US$ 543 would put you in the 10%.

Average Order Value is the average number of revenue your ecommarce store generates from all the checkout orders.

The high AOV means you're getting more from your customers, they purchase multiple items from the store and increase your revenue.

Yes, AOV is a commonly used KPI for many reasons. For example, it helps online businesses to calculate and, thus, understand their buyers' purchasing habits. Like most online tactics, AOV can be tracked for any time period, but most businesses monitor the moving monthly average.

Average order value (AOV) is, very simply, the average amount each shopper spends when they make an order via your online store. Online businesses increasingly view average order value as one of the most significant tactics because it provides them with important insights which can inform their marketing and pricing strategies.