Average Order Value (AOV)

Average order value (AOV) is the average amount a customer spends in a single order. AOV stands for average order value. E-commerce and retail businesses track it to measure purchase size and grow revenue without spending more to attract traffic.

The AOV Formula

AOV is calculated by dividing total revenue by the number of orders over a set period:

AOV = Total Revenue / Number of Orders

A store with $50,000 in revenue from 800 orders has an AOV of $62.50.

AOV counts orders, not customers or visitors. One customer who places three separate orders counts as three orders, not one. The time period must be defined, because monthly, quarterly, and annual AOV produce different numbers.

Revenue should reflect what customers actually paid. Include discounts and shipping if customers were charged for them. Exclude tax and refunds to keep the figure clean and consistent.

Why AOV Matters

AOV is one of three levers that drive ecommerce revenue, alongside traffic and conversion rate:

Revenue = Traffic × Conversion Rate × AOV

Raising AOV grows revenue without paying for more visitors. It is often the cheapest lever to move, because the customer is already on the site and ready to buy.

A higher AOV also improves profitability. Acquisition cost and shipping are largely fixed per order. When the order is bigger, those fixed costs shrink as a share of revenue, and margin per order rises.

AOV feeds other metrics too. It is a direct input to customer lifetime value and to return on ad spend.

How to Increase AOV

Increasing AOV means getting customers to add more to each order.

1. Cross-sell related products. “Frequently bought together” suggestions and cart add-ons surface complementary items.
2. Upsell to higher tiers. Offer a larger size, a premium version, or a bundle at the point of decision.
3. Set a free-shipping threshold. A threshold slightly above current AOV nudges customers to add one more item. Set it at $75 when AOV is $62.
4. Create product bundles. Packaged sets raise the per-order total and feel like a better deal to the buyer.
5. Offer volume discounts. “Buy 2, get 10% off” rewards larger carts.
6. Add spend-based incentives. A free gift or discount unlocked at a spend level pulls order totals upward.

Pushing AOV too hard can hurt conversion rate. Track both metrics together, so larger orders do not come at the cost of fewer orders overall.

What Is a Good AOV?

There is no universal good AOV, because it depends entirely on the industry and product price. A jewelry store and a snack brand will never share a benchmark.

The useful comparison is your own AOV over time and against close competitors. A rising AOV trend signals effective merchandising and pricing. AOV also varies by traffic source. Email and returning visitors typically produce a higher AOV than cold paid social traffic.

To compare AOV by channel, tag every campaign link with consistent UTM parameters, so GA4 reports order value next to the source that drove it.

Frequently Asked Questions

What does AOV stand for?

AOV stands for average order value. It is the average amount a customer spends per order, calculated as total revenue divided by total orders. The metric is used mainly in ecommerce and retail to measure purchase size and revenue performance.

How do you calculate AOV?

Divide total revenue by the number of orders over a set period. A store with $50,000 in revenue from 800 orders has an AOV of $62.50. Use the same time window each time, and decide upfront whether to include shipping and discounts so the number stays consistent.

What is a good AOV?

There is no universal good AOV, because it depends on the industry and product price. A good AOV is one that trends upward over time and compares well against direct competitors. Email and returning-visitor traffic usually produce a higher AOV than cold paid traffic.

How can you increase AOV?

Cross-sell related products, upsell to higher tiers, set a free-shipping threshold slightly above your current AOV, create bundles, and offer volume discounts. Track conversion rate at the same time, since aggressive upselling can reduce the number of orders even as it raises their size.

What is the difference between AOV and revenue per visitor?

AOV measures the average value of each order. Revenue per visitor (RPV) measures the average revenue from each site visitor, including those who never buy. RPV = AOV × conversion rate. AOV isolates purchase size, while RPV reflects both purchase size and how often visitors convert.

Calculate your store’s average order value in seconds with linkutm’s free AOV calculator.