Key Takeaway: Average order value is one of the cheapest ways to grow revenue. It doesn't require a single new customer, just a bit more from each existing sale.
What's on This Page
The Formula
Example
$60,000 revenue across 800 orders in a month.
Tactics to Increase AOV
- Free shipping thresholds set just above your current AOV
- Bundling complementary products together
- Upsells at checkout for a directly relevant, higher-value option
- Volume pricing that rewards buying more per order without a blanket discount
What a Rising or Falling AOV Actually Means
A rising AOV alongside stable order count usually means these tactics are working. A falling AOV alongside rising order count can mean you're attracting more price-sensitive traffic. Not necessarily bad, but worth knowing which one is driving your revenue growth.
For further reading, see the U.S. Small Business Administration's guide to managing a business.
Checklist
- Calculate current AOV: total revenue divided by number of orders
- Set a free-shipping threshold just above that number
- Identify 2-3 natural product bundles
- Add a relevant upsell option at checkout
- Track AOV by channel separately
- Recheck AOV monthly to see if tactics are working
Common Mistakes
FAQ
What's a good way to raise AOV without discounting?
Bundling complementary products and setting a free-shipping threshold just above current AOV are two of the most effective non-discount tactics.
Does a rising AOV always mean things are improving?
Generally yes, but check it alongside order count. A rising AOV with falling order count could mean fewer, larger orders rather than genuine growth.
How is AOV different from customer lifetime value?
AOV measures a single transaction. Lifetime value measures the total value of a customer across their entire relationship with the business.
Should AOV be tracked per channel?
Yes, since different channels often have very different typical order sizes, and a blended number can hide that.
Calculate This For Your Business
Related Guides in the Sales Academy
- Sales KPIs. AOV alongside the other numbers that matter
- How to Track Sales Properly. the foundation this metric is built on
- Sales Dashboard Guide. another guide in the Sales Academy