Definition
Average order value (AOV) is the average amount of revenue a store earns per order over a given period. It answers a simple question: when a customer buys, how much do they typically spend?
AOV is one of the three numbers that determine ecommerce revenue, alongside traffic and conversion rate. Because it multiplies through every order, a small, durable increase in AOV lifts total revenue without needing a single extra visitor or a single extra sale.
How to calculate AOV
The formula is straightforward:
AOV = Total revenue ÷ Number of orders
Measure both over the same window, and use a consistent period so the figure is stable. For example, a store that earns 130,000 dollars from 2,000 orders in a month has an average order value of 65 dollars. You can run the numbers for your own store with the average order value calculator.
A note on consistency: decide whether your revenue figure includes tax and shipping and stick to it, because comparing an AOV that includes shipping to one that does not is meaningless.
Why AOV matters for revenue
AOV is a quiet lever with outsized impact. Total revenue is roughly traffic multiplied by conversion rate multiplied by average order value, so raising AOV scales the whole equation. Raising it is often cheaper than raising traffic, because you are earning more from customers you already have.
The reliable ways to increase AOV all live on the path to purchase: relevant cross-sells and bundles, quantity incentives, and free-shipping thresholds that nudge the basket higher while reducing shipping-cost objections. Most of these are set on the product page, which is why our guide to product page optimization treats AOV as a primary outcome, not an afterthought.
From a Revenue Intelligence perspective, AOV is also a multiplier in how you price a leak. When you quantify what a conversion leak costs, you multiply the lost conversions by AOV, so a higher AOV makes every recovered sale worth more. Our guide to the Revenue Intelligence framework shows how this pricing works, and a low or declining AOV can itself be a revenue leak worth investigating.
Related metrics
Average order value works alongside two other core metrics. Conversion rate, the share of visitors who buy, multiplies with AOV to set your revenue per visitor, so the two are usually improved together. Customer lifetime value extends AOV across a customer's whole relationship, capturing repeat purchases that a single order value misses. Read together, they describe how much a customer spends per order, how often visitors convert, and how much each customer is ultimately worth.
In short
Average order value is revenue divided by orders. It is one of the three multipliers behind ecommerce revenue, it is usually cheaper to grow than traffic, and it makes every other improvement worth more. Track it consistently, and treat a durable increase in AOV as one of the most efficient sources of growth available to a store.