What is Average Order Value? (AOV)

Average order value is the average dollar amount a customer spends in a single order.

How does AOV work?

Divide total revenue by number of orders over the same period. $200,000 across 4,000 orders is an AOV of $50. Note that it is orders, not customers: one buyer placing three orders counts three times.

Why does AOV matter?

It is one of three levers on ecommerce revenue, alongside traffic and conversion rate, and it is usually the cheapest to move. Lifting AOV costs nothing in ad spend. It also sets the ceiling on what you can afford to pay to acquire a customer.

Where did AOV come from?

Retail has tracked basket size for as long as there have been cash registers. Ecommerce renamed it and made it a dashboard staple, because order-level data was suddenly free to collect and easy to chart. Shopify's guide is the practical reference most operators reach for.

How do you use AOV well?

Segment it. A blended AOV hides that your paid traffic buys $30 while your email list buys $90. Watch it next to conversion rate, since bundles and order minimums that lift AOV can quietly suppress order count. Pair it with margin, because a bigger order of your worst-margin product is not a win. B2B teams track the same idea as annual contract value.

Bottom line: AOV is the revenue lever you can pull without buying more traffic.

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