What Is Average Order Value (AOV)?
DEFINITION
Average order value is total revenue divided by the number of orders over the same period. It is one of the three levers on eCommerce revenue, alongside traffic and conversion rate, and usually the cheapest of the three to move.
AOV is simple to calculate and easy to move in the wrong direction. Every common tactic for raising it — bundles, thresholds, upsells — trades against either conversion rate or margin, which means the number on its own cannot tell you whether the change was a good idea.
Raising average order value is usually cheaper than buying more traffic — if margin holds.
- The formula
How average order value is calculated
One division, and three decisions about what goes into it.
FORMULA
AOV = Total revenue ÷ Number of orders
Which revenue
Net of returns and discounts if you want the figure to inform a decision. Gross revenue AOV looks better and is less useful, particularly in categories with heavy returns.
Which orders
Completed orders over the same period as the revenue. Include or exclude cancellations consistently, because switching between the two makes a trend look like a result.
Which period
Long enough to smooth promotions. A month is usually right; a week during a sale tells you about the sale rather than about the business.
Segment it before acting on it. New and returning customers, and each acquisition channel, usually have materially different order values.
- Worked example
When raising AOV makes you less money
Two interventions, both of which raise average order value. Only one of them improves the business.
Line
Baseline
Bundle discount
Higher free-ship threshold
Sessions
100,000
100,000
100,000
Conversion rate
2.0%
2.1%
1.9%
Orders
2,000
2,100
1,900
Average order value
60.00
72.00
74.00
Revenue
120,000
151,200
140,600
Contribution margin
34%
26%
35%
Contribution
40,800
39,312
49,210
Verdict
Baseline
Worse, despite higher AOV
Better, despite lower conversion
Illustrative figures chosen so the trade-off is visible. The bundle raised AOV and revenue while discounting away more margin than it gained; the threshold lost conversions worth less than the carriage it saved.
- The three levers
Ways to actually move it
In rough order of how often they work without damaging something else.
Free delivery threshold
- Set it against real carriage cost, by weight and zone
- Show progress toward it in the basket
- Test it: too high costs conversion, too low costs margin
- Usually the single highest-leverage number in the store
Bundles and multibuys
- Bundle things genuinely used together, not stock you want gone
- Watch the discount depth, because it comes straight off margin
- Compare contribution, not revenue, before and after
- Works best where the second item has a high margin
Product mix and pricing
- Merchandise higher-value lines above entry products
- Introduce a genuinely premium option, which lifts the mid-tier
- Review entry price points that anchor the whole catalogue low
- Slowest lever, and the one that does not decay
Cross-sell placement
- Relevant recommendations at the basket, not the product page
- Small add-ons convert better than second full-price items
- Irrelevant suggestions delay a decision already made
- Measure the effect on conversion, not just attachment rate
Every one of these trades against conversion or margin. Measure revenue per session and contribution alongside AOV, or you cannot tell a win from a shuffle.
- Context
A benchmark for AOV is almost always useless
Published average order values combine businesses selling nine-pound consumables with businesses selling sofas. There is no meaningful comparison there.
The useful comparisons are internal: your own AOV over time, by channel, by device and by new versus returning customer. Those splits tell you something you can act on, and they are free to produce.
- Your own trend, month over month, net of returns
- New versus returning customers — usually a large gap
- By channel: paid social AOV is often below organic
- By device: mobile AOV is typically lower, which is worth knowing before you optimise
- By category, which tells you what to merchandise harder
If an external number is genuinely needed, use one from your own category and price band, and treat it as context rather than a target.
The basket is where most AOV work happens, and where most stores have never made a deliberate decision.
- Common mistakes
Three ways AOV gets misused
All three produce a rising chart and a flat bank balance.
Buying AOV with discount
Bundle and multibuy offers raise order value and reduce margin simultaneously. If the discount is deeper than the extra contribution, revenue rises while contribution falls, which is the most common way this metric misleads.
Watching AOV without conversion
Raising a free delivery threshold will always raise AOV, because it removes small orders. Whether that is good depends entirely on how many of those orders you lost, which AOV alone will never show you.
Comparing against a published benchmark
Category, price point, traffic mix and device split all move AOV more than any optimisation will. Your own segmented trend is a better comparison than any industry average.
Watch revenue per session alongside AOV. It catches every change that raises order value by losing orders.
- Related terms
Terms that travel with this one
AOV is one of three levers, and it interacts with all of these.
Conversion rate
Orders divided by sessions. The lever AOV most often trades against, which is why they should be read together.
Revenue per session
Revenue divided by sessions. Catches changes that raise AOV by losing orders, which AOV alone cannot.
Free shipping threshold
The order value above which delivery is free. Usually the highest-leverage single number for moving AOV.
Contribution margin
What remains after goods, fulfilment and marketing. Tells you whether a higher AOV was actually worth having.
Customer lifetime value
Total contribution across the relationship. A lower AOV with high repeat purchase can be worth more than the reverse.
Return on ad spend. Rises with AOV at constant spend, which makes AOV the least painful way to improve it.
- Questions
Average order value FAQs
What people ask most often about the metric.
How do I calculate average order value?
Divide revenue by the number of orders over the same period. Use revenue net of returns and discounts if the figure is going to inform a decision, and keep the treatment of cancellations consistent between periods so a definition change does not look like a result.
What is a good average order value?
There is no useful universal figure, because AOV is mostly a property of what you sell and at what price. A store selling consumables and one selling furniture have nothing to compare. Your own trend, segmented by channel, device and customer type, is the comparison worth making.
What is the fastest way to raise it?
For most stores, reviewing the free delivery threshold against real carriage cost, and showing progress toward it in the basket. It requires no new products, no discounting and no development work, and it is frequently the number that has never been deliberately set.
Does raising AOV always increase profit?
No. Bundles and multibuys raise AOV by discounting, and if the discount exceeds the extra contribution the business makes less money on higher revenue. Always check contribution margin and revenue per session alongside AOV.
Should I measure AOV gross or net of returns?
Net, in any category where returns are material. In apparel especially, gross AOV describes money that partly came back, which then flows into every marketing calculation built on top of it.
Why is my mobile AOV lower than desktop?
It usually is, across most categories. Mobile carries more discovery and impulse behaviour, and considered high-value purchases more often complete on a larger screen. It is a reason to optimise for the journey rather than to conclude mobile is worth less.
How does AOV relate to ROAS?
Directly. At constant advertising spend and conversion rate, raising AOV raises ROAS proportionally. It is usually easier to move than conversion rate and far cheaper than buying more traffic.
Can you help us raise ours?
Yes. Threshold modelling, basket merchandising and bundle economics are part of conversion work, and the free audit includes a look at whether your delivery threshold is set anywhere near the right level.
- Keep reading
Related resources
Where to go once you know which lever to pull.
CHECKLIST
Forty checks on product page, basket and checkout, including the basket work most AOV gains come from.
TEMPLATE
A workbook that tracks AOV alongside contribution margin, so you can see the trade-off rather than one side of it.
DEFINITION
Why raising average order value is the least painful way to improve return on ad spend.
When did you last review your delivery threshold?
For most stores it was set at launch and never checked against carriage cost. A free eCommerce audit models it properly, alongside the rest of the conversion and margin picture.