Comprehensive Guide
Learn more in our Business & Tax Guide.
How it works
Average order value (AOV) is the typical amount a customer spends in a single order, calculated by dividing total revenue by the number of paid orders over the same period. A store taking $48,500 across 1,250 orders in a month has an AOV of $38.80 — the lever behind nearly every revenue plan that doesn't rely on more traffic. That is because revenue is just three factors multiplied together: visitors, conversion rate, and AOV. The first two cost money to move; AOV often doesn't. Bundles, free-shipping thresholds, post-purchase offers and tiered pricing all raise what an existing checkout produces. The calculator annualizes your figures so the scale of small per-order changes becomes visible: forty cents per order on 15,000 yearly orders is $6,000 of revenue that required no extra advertising. Enter an optional target and it prices the gap — the dollars per order between here and there, times your order volume. Two cautions keep the number honest. Discounts inflate basket size while shrinking the margin inside it, so an AOV lifted by coupons can be worth less than a smaller full-price one. And AOV alone says nothing about frequency or margin — read it next to contribution margin and repeat-purchase behavior before declaring victory.Formula
AOV = total revenue / number of paid orders | extra yearly revenue = (target AOV - current AOV) x orders x periods per year
Tips
- Set free-shipping thresholds about 15% above your current AOV — the most reliable single nudge.
- Bundles beat discounts: they raise order size while protecting the margin per unit.
- Post-purchase upsells convert best — the buyer has already decided to trust you once.
- Track AOV alongside conversion rate; squeezing one can quietly deflate the other.
- Segment AOV by channel — paid social baskets rarely match email or organic search baskets.
Frequently asked questions
What is average order value?
The average amount a customer spends per order. Divide total revenue by the number of paid orders over the same period: $48,500 across 1,250 orders is an AOV of $38.80. It measures basket size independent of how much traffic the store gets.
How do you calculate AOV?
Take the revenue for any period — a day, month or year — divide it by the number of paid orders in that period, and you have AOV. Exclude unpaid, cancelled or test orders or the figure understates real basket size.
What is a good average order value?
There is no universal number — groceries might sit near $50 while furniture runs to hundreds. What matters is the trend and the relationship to your acquisition cost: if a first order barely covers its ad cost, a higher AOV is what makes the economics work.
How can I increase my AOV?
Bundled products, free-shipping thresholds set above the current AOV, volume pricing, cross-sells in cart and post-purchase one-click upsells are the proven levers. All of them raise order size without spending more on traffic.
Does discounting increase average order value?
Often yes — minimum-spend coupons push baskets up — but the margin per order usually falls faster than AOV rises. Judge discount-driven AOV against contribution margin, not against the revenue headline.