Average order value: formula and how to increase it
Average Order Value (AOV) is the average revenue per order/deal for the selected period. The metric reflects the value of each purchase and helps you understand how pricing, assortment, and upselling mechanics are performing. Growth in average order value with stable conversion and margin accelerates revenue without a proportional increase in traffic.
What the metric means
Average order value shows whether customers choose more expensive products/plans and how effectively upselling and cross-selling (upsell/cross-sell) and bundles work. It helps assess the effect of promotions, free shipping "above a threshold," and pricing changes.
Calculation
- AOV = Revenue for the period (excluding VAT, net of returns per company rules) / Number of orders (receipts)
- For services and B2B, it makes sense to calculate based on service acceptance certificates/contracts
- Distinguish AOV from ARPU: ARPU is the average revenue per customer for the period, while AOV is per order
Calculation example
In a week a store took 840,000 in revenue from 1,400 receipts. Average order value = 840,000 / 1,400 = 600. If the number of receipts stayed the same and the average rose to 650, weekly revenue would grow by 1,400 × 50 = 70,000.
Data sources
POS/cash register systems, online store CMS and marketplaces, ERP/1C, CRM, and billing. It is important to synchronize product/plan reference lists and use uniform rules for accounting for discounts and returns.
Interpretation
An increase in AOV may result from price increases, a change in the mix (a shift to premium SKUs), effective upselling, or free shipping thresholds. Monitor conversion and the number of orders at the same time: sometimes a higher order value is accompanied by a drop in volume, which worsens the bottom line.
Useful breakdowns
- Sales channels: online, offline, marketplaces, partners
- Product categories, pricing plans, bundles
- Regions, points of sale, sales managers
- New vs repeat customers, loyalty programs
- Promotions/discounts, delivery and payment methods
Dashboard visualizations
- AOV line over time compared with the previous year
- AOV bars by channel/category/segment
- Distribution (histogram) of order amounts to detect "long tails"
- Relationship between AOV and the number of items per order (scatter)
- AOV plan vs actual with control thresholds
Approaches to growth
- Combo bundles and cross-selling at the cart stage
- Threshold incentives: free shipping/a gift "above a threshold"
- A good–better–best pricing tier structure with clear differences
- Personalized recommendations and upselling based on purchase history
- Communicating the benefits of premium items: warranty, service, terms
How to set targets
Rely on historical data, demand elasticity, profitability, and the role of each channel. Set target AOV ranges by segment, as well as related metrics (conversion, gross margin, share of discounts), to avoid "growth at any cost."
Common mistakes
- Confusing AOV with ARPU
- Ignoring returns and promotional bonuses in revenue
- Comparing unequal periods without accounting for seasonality
- Mixing currencies and VAT rates
- Analyzing only the average without assessing the distribution of order amounts
Questions for discussion
- Which categories/channels deliver the highest AOV, and why?
- Are cross-selling and bundles working as expected?
- What cart threshold is optimal for free shipping?
- How did AOV change after the pricing plans or promotions were revised?