What is your average order value (AOV)

If you have an e-commerce store (online shop) this is the average amount that customers spend when they place an order with you. You probably have a rough idea in your head what this is already. Would you like to grow this number?

Here is the formula to calculate it:

Total revenue divided by the total number of orders = AOV


  • $5000 total revenue
  • 50 orders
  • = $100 AOV

You can measure this across a month, a quarter or a year and give yourself a good insight into your customers.

What is the benefit of knowing this number for your business? By looking at the average order value (AOV) we can look at ways to increase your overall revenue.

Are you interested in increasing the revenue in your business?

How to increase your AOV

Have a minimum value for free shipping – Now, it is vital that all online stores have free shipping available. By setting your free shipping value point, higher than your AOV you will automatically increase your AOV. Another tip is to offer free gifts when a certain amount is added to the cart as an incentive to increase the order value.

Have a package or bundle deal – Create a bundle of products yourself and then offer it at a packaged price that is slightly cheaper than it is offered individually. Or you may offer 3 packs or 4 packs on the same item with a slightly lower price due to the bundle on offer.

Do you have complementary products – Have you ever visited another online store and seen the customers frequently bought together option. For example, you may be looking at a camera and then the complementary products are batteries, bags, a lens and more.

Cross-selling, just as you may have been asked ‘Would you like fries with that?’, is another great strategy to suggest to people that they need something additional they cannot resist.

Use design to highlight popularity – On your website you can highlight the option of what is the most popular or the item you want people to choose. This is often used when there is a 3 choice model and the middle of the 3 is highlighted as being the most popular.

Live chat – If you have the time or available staff, offering a live chat can be wonderful for your business. It can answer immediate questions and therefore help to generate an immediate sale of that item. Or you may be able to help someone find exactly what they are looking for.

Please don’t add a live chat if you are never going to be available it will just frustrate your customers as they have to wait for your reply. While they are waiting they may have already found what they want elsewhere. Without offering live chat you need to ensure you have all potential questions answered on your website.

Loyalty programs – Regardless of the size of your business a loyalty program is a great incentive to spend. You may offer $$ back for amounts spent, a percentage off for joining and many more options. Regardless of the method, you have a captive audience to market and incentivise both their initial and ongoing spending.

Payment plans or layby – Businesses of all sizes can offer payment plans. This may be through ‘Afterpay’ or similar, but you can also offer an old fashioned layby in-house if you have the room to store the item while it is paid off.

Don’t be confused

Make sure you don’t confuse average order value (AOV) with profits or margins as these are separate metrics. AOV is about looking at ways to increase your revenue which should ultimately lead to more profits, but you also need to look at your postal costs, item costs and handling to ensure that increasing your AOV still maximises these areas too.

Ecommerce is not always what you think it is and it takes a lot of work to ensure that you have a business that generates sales and grows over time.

There are plenty of courses that offer you guaranteed success in selling your items online. I’m sure you have seen the ads that promote these successes like $20K sales in 1 week etc. Remember these are short term results that have costs associated with getting them.

Think further about these results and the costs to get there:

  • The cost of the course
  • Cost of the product
  • The cost of the ads to sell the product
  • Shipping, storage, packaging and much more…

Take the time to have a strong knowledge of all the different aspects of your business and what it costs to achieve your business goals. You need to have a budget for today and for the long term that is more than just the purchase of stock and more than just the AOV.

Looking beyond the AOV

If you can recall back to high school maths you may have been taught – Mean, Median & Mode

Mean – Average (AOV)

Median – The middle value of your list of values

Mode – The most frequent value

Looking at the mode

While the mean or average order value in our example at the top of this blog is $100, in a typical business this example would not have been so simple. There would have been sales that are higher than $100 and sales that are lower than $100.

If we look at the mode, or the most frequent sale size over a month or year this value is the perfect starting point when you look at increasing your order values. Now, how can you use the strategies mentioned above to improve the most frequent sales on our website?

Marketing budget

One item that is overlooked for many businesses is the marketing budget and what it has to include.

  • Website and the costs to keep it up to date
  • Photography of your products
  • Packaging of your products
  • Social Media and Paid ads
  • SEO and Paid ads
  • Email marketing and more

This marketing budget needs to be in place for the life of your business. Think about large brands, they have never stopped marketing regardless of how successful they are!


Running an e-commerce business takes a lot of work, knowledge and effort. I hope I have given you many areas of your business that you can work on today to improve your outcomes and ultimately the revenue of your business. Make sure you remember to market your business during both the busy and the quiet times and don’t just wait till you are struggling before you wish you had done more.

So often business owners look at ways to cut costs instead of looking at ways they can grow their sales or revenue. While cost-cutting is sometimes necessary you should not be cost-cutting in areas that actually work to grow your sales and revenue.

Do you need help to grow your revenue? Contact Kelly @ My Sassy Business

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