The AOV formula
Average order value = Total revenue ÷ Number of orders
Average order value (AOV)
AOV is how much a customer spends per order — and lifting it is one of the cheapest ways to grow, because you already have the customer.
Why AOV is such a good lever
Winning a new customer costs money — ads, discounts, time. Getting an existing customer to spend a bit more in the same order costs almost nothing. And because the fixed costs of an order (payment fee, packing time, the trip to the post office) stay roughly the same, spreading them over a bigger basket lifts your margin, not just your revenue.
That’s why AOV sits alongside margin as a core profit metric: margin is how much you keep per dollar, AOV is how many dollars per order, and together they drive profit per customer.
Seven ways to increase AOV
- Free-shipping threshold. “Free shipping over $50” nudges a $40 basket up to $50.
- Bundles. Package complementary items at a small saving versus buying separately.
- Volume discounts. Buy 2 get 10% off — more units per order at a controlled margin cost.
- Upsells. Offer a larger size or premium version on the product page.
- Cross-sells.Suggest “frequently bought together” items at checkout.
- Loyalty rewards. Points or perks that scale with basket size.
- Gift-wrap & add-ons. Small, high-margin extras that lift the total painlessly.
Protect your margin while you do it
Every AOV tactic has a margin cost — a discount, a free-shipping giveaway, a bundle price. Before you launch one, check it still leaves a healthy margin with the profit margin calculator, and see how discounts affect profit margin so a bigger basket doesn’t quietly cost you money.
Pricing & margin guides
How to Calculate Profit Margin
The profit margin formula explained with step-by-step worked examples.
Margin vs Markup
Why they're not the same, the formulas for each, and a conversion table.
How to Price a Product
A step-by-step pricing method that protects your margin from day one.
What Is a Good Profit Margin?
Healthy margin benchmarks by industry and how to know where you stand.
How to Calculate Break-Even Point
The break-even formula, contribution margin, and how many units you must sell.
Cost of Goods Sold (COGS)
What counts as COGS, what doesn't, and the formula to calculate it.
Gross Profit vs Net Profit
The difference between the two, with a worked income-statement example.
How Discounts Affect Profit Margin
Why a small discount cuts profit hard, and the extra volume needed to break even.
Contribution Margin
What contribution margin is, the formula, and how it drives break-even.
Fixed vs Variable Costs
The difference, why it matters for pricing, and how to classify your costs.
Keystone Pricing
The classic 2x markup rule — what it is, the margin it gives, and when to use it.
Retail vs Wholesale Pricing
How to price for both channels without eroding your retail margin.
How to Calculate ROI
The return on investment formula with worked examples for stock and ads.
How to Increase Profit Margin
Ten practical, tested ways to widen your margin without losing sales.
More free calculators
Profit Margin Calculator
Sale price, margin, markup, or cost — four modes for any scenario.
Etsy Profit Calculator
Net profit after Etsy listing, transaction, payment, and Offsite Ads fees.
Amazon FBA Profit Calculator
Net profit, margin and ROI after Amazon referral, fulfillment and storage fees.
eBay Profit Calculator
Net payout after eBay's final value fee, per-order charge and international fees.
Shopify Profit Calculator
Real profit per sale after Shopify payment processing, surcharges and plan share.
Frequently asked questions
What is the average order value formula?
Average order value (AOV) = total revenue ÷ number of orders. If you made $12,000 across 400 orders, your AOV is $30. It measures how much a customer spends per transaction on average.
Why is average order value important?
Raising AOV grows revenue without the cost of acquiring new customers, so it usually improves profit margin too — the fixed costs of processing and shipping an order are spread over a larger sale. It's often the cheapest growth lever a store has.
What is a good average order value?
There's no universal 'good' AOV — it depends entirely on what you sell. What matters is the trend: a rising AOV over time, and an AOV comfortably above your cost to fulfil and acquire each order. Track it monthly against your own baseline.
How can I increase my average order value?
Common tactics include free-shipping thresholds, product bundles, volume discounts, cross-sells and upsells at checkout, and loyalty rewards for larger baskets. Each nudges customers to add a little more per order.
Does a higher AOV always mean more profit?
Usually, but not if you buy the higher AOV with deep discounts that erode your margin. A free-shipping threshold works because the extra item's margin more than covers the shipping. Always check the margin impact of any AOV tactic before rolling it out.