AOV (Average Order Value)
Definition
The average amount a customer spends per order. Raising it spreads fixed per-order costs like shipping and acquisition across more revenue.
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Formula
AOV = Net Sales ÷ Number of OrdersAOV matters because many costs are per order, not per dollar. Picking, packing, shipping and the cost of acquiring the customer are roughly the same whether the order is $30 or $90.
Bundles, free-shipping thresholds and upsells are the usual levers to raise it. Watch for: discounts that lift order count but drag AOV down, which can leave you busier but less profitable.
Example
$90,000 of net sales from 1,500 orders gives a $60 AOV.