AOV (Average Order Value) Calculator

What is Average Order Value?

Average order value is calculated by taking the total revenue over a given period and dividing it by the total number of orders in that same period.

How to Calculate Average Order Value (AOV) for Ecommerce

Average order value (AOV) is a metric that measures the average spend per order in your ecommerce store. Calculating AOV allows you to understand customer purchasing patterns and how much revenue you’re generating per transaction. This insight helps guide marketing and pricing strategies to maximize customer lifetime value. Here’s how to calculate AOV and ways to use it to improve your business.

AOV Formula:

AOV = Total Revenue / Total Orders

For example, if your total revenue over the past month was $10,000 and you had 250 orders, your AOV would be:

AOV = $10,000 / 250 orders = $40

So the average order value is $40. This means that on average, each customer spends $40 each time they place an order.

Why Calculate AOV?

Knowing your ecommerce store’s AOV is important for several reasons:

• Evaluate customer segments – Calculate AOV for different customer groups (new vs returning, geographic, referral source etc) to identify your best customers. Use this to target marketing.
• Set pricing – If your AOV is lower than competitors, you may have room to optimize pricing. AOV can identify if you’re leaving money on the table.
• Forecast revenue – AOV x number of sales = expected revenue. AOV helps accurately predict future income.
• Identify upsell opportunities – A low AOV signals opportunity to increase order size through upsells, cross-sells or improved merchandising.
• Measure performance – Compare AOV week-over-week or month-over-month to evaluate marketing campaigns and sales initiatives. Increased AOV indicates success driving higher value orders.

Analyzing AOV is simple but provides actionable data to optimize customer value. Monitor this metric regularly to inform your ecommerce strategy and grow your bottom line revenue per order.