What is AOV (Average Order Value)?
In short
Average order value is the total revenue of a period divided by the number of orders in that period. It tells you how much a typical customer spends in one purchase, and it sets the limit on what you can afford to pay to win that purchase.
Average Order Value (AOV) is calculated by dividing total revenue by the number of orders. You can increase AOV through volume discounts, free shipping thresholds, or upselling.
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Try ShopifyHow it works in practice
AOV is a ratio, so it moves for two reasons: the mix of products people buy, and the number of items in a typical order. A store that suddenly discounts its cheapest category will see AOV fall even if nothing is wrong. That is why the number is only useful next to conversion rate and order volume.
Most teams track AOV weekly or monthly and split it by traffic source. Paid search, email and direct traffic usually produce different averages, because the people behind them arrive with different intent. The split tells you where a bundle or a shipping threshold will actually change behaviour.
The levers are simple: free-shipping thresholds, bundles, volume discounts, and complementary product recommendations at the right step. None of them works everywhere. A threshold helps a store with many small baskets and does almost nothing for a store selling one expensive item at a time.
Why it matters for an online store in the EU
Shipping across EU borders costs real money per parcel, and returns cost money again. When each order carries more value, the fixed cost of picking, packing and delivering it is spread over a larger sale. A store shipping from one country to several markets feels this immediately: the same parcel, a larger invoice. AOV also sets the ceiling for what you can afford to pay for a click, which is why it belongs in every advertising discussion.
Common mistakes
- Changing the formula between reports, so the trend is meaningless.
- Reading AOV alone and missing that the conversion rate fell at the same time.
- Setting a free-shipping threshold far above the current average, so nobody reaches it.
- Treating a single large wholesale order as a trend.
- Bundling products that have nothing to do with each other, just to lift the number.
Related terms
- Cross-selling — the most direct way to add items to an order.
- Upselling — trading up to a higher-value version.
- LTV — what the customer is worth over time.
- Conversion rate — the number AOV must always be read against.
- CAC — what you paid to get the order in the first place.
- ROAS — how AOV feeds advertising returns.
- Shopify agency in Europe — help with store and campaign setup.
- About Sell Easy — who we are and how we work.
Frequently asked questions about AOV
How do I calculate average order value?
Divide total revenue by the number of orders for the same period. Use the same definition every time: decide upfront whether you include shipping, taxes and discounts, and whether refunded orders stay in the count. A number that changes definition between reports is worse than no number at all.
Is a higher AOV always better?
Not on its own. Pushing bundles and minimum-spend thresholds can raise AOV while fewer people buy at all, so total revenue drops. Always read AOV next to conversion rate and order volume. The healthy pattern is a rising AOV with a stable or improving conversion rate.
What is the fastest way to raise AOV?
Usually a free-shipping threshold set slightly above your current average, paired with a clear progress message in the cart. After that, complementary product recommendations on the product page and in the cart. Both are quick to set up in Shopify and easy to measure with a simple before-and-after comparison.