Average Order Value (AOV)
The average revenue generated per order over a defined period, calculated as total revenue divided by the number of orders.
AOV sets how much a store can afford to pay to acquire each order, so it shapes target CPA and ROAS, free-shipping thresholds, bundling and pricing decisions, and the revenue impact of every conversion rate change.
A store books $84,000 in revenue from 1,200 orders in March, so AOV is $84,000 ÷ 1,200 = $70. Setting a free-shipping threshold at $85 and adding a bundle offer then raises April AOV to $78 on similar order volume.
AOV is a mean, so a few very large orders can pull it up while most baskets stay small, which is why median order value helps. Raising AOV through discounts or bundles can lower margin or order count, so pair it with gross margin and conversion rate.
AOV equals total revenue in a period divided by the number of orders in the same period. Teams must state whether revenue includes tax, shipping, discounts and refunds, and apply the same rule over time. AOV multiplied by purchase frequency and margin feeds Customer Lifetime Value (CLV), and Return on Ad Spend (ROAS) targets depend on it. Upselling and Cross-Selling are the usual levers to raise it.
Performance Advertising
Shopify — Average Order Value: Formula and 7 Ways — https://www.shopify.com/blog/average-order-value; BigCommerce — Average Order Value: Importance + Key AOV Strategies — https://www.bigcommerce.com/glossary/average-order-value/