What is average order value? AOV explained
Average order value, or AOV, is the average amount customers spend per order. Here is what AOV means, how to calculate it cleanly, a worked SAR example, how it links to conversion rate and break-even ROAS, and how to raise it.
Average order value, or AOV, is the average amount customers spend each time they place an order. Divide revenue by orders for the same period. Together with traffic and conversion rate, it is one of the three numbers that drive ecommerce revenue, and a higher AOV gives each order more margin to pay for the ads that won it.
How do you calculate average order value?
| Metric | Formula |
|---|---|
| AOV | Revenue ÷ number of orders |
| Revenue | Sessions × conversion rate × AOV |
| Revenue per visitor | Conversion rate × AOV |
Decide what revenue means and keep it fixed: net of VAT, discounts and shipping charges is the cleanest. Remove canceled orders, and where cash on delivery is common, consider removing refused deliveries too, or AOV will look better than the cash you actually collect.
Average order value example
An illustrative week for a Saudi beauty store, net of VAT:
- Revenue: SAR 252,000 from 1,400 orders, so AOV is SAR 180.
- A free-delivery threshold at SAR 220 lifts AOV to SAR 205 with the same 1,400 orders, so revenue rises to SAR 287,000.
- Costs that are fixed per order, such as delivery and packaging, now take a smaller share of each sale, which raises contribution margin and lowers break-even ROAS.
What is a good average order value?
There is no universal good AOV: it depends on what you sell, your price points and how often customers buy, so a grocery app and a furniture store have nothing to compare. Track AOV against your own history by channel, campaign and season, and check that increases come from bigger baskets rather than price rises that cut conversion rate.
Related terms
- Conversion rate: multiplied by AOV, it gives revenue per visitor.
- Customer lifetime value: AOV × purchase frequency × margin × lifetime.
- Break-even ROAS: falls as AOV rises when costs per order are fixed.
- Contribution margin: what each order leaves after variable costs.
How Grower helps
Grower's web analytics covers users, traffic, engagement and e-commerce, and campaign groups show spend by channel and ROAS over time. In the Creative Hub you can generate and compare product description and ad copy options for bundles and offers.
Frequently asked questions
How do you increase average order value?
Give customers a reason to add more. Common tactics are free-delivery thresholds set just above current AOV, bundles and multi-buy offers, product recommendations at checkout, tiered discounts and larger pack sizes. Watch conversion rate and margin while you test, because a threshold that is too high or a discount that is too deep can lower total profit.
Should AOV include VAT and shipping?
For margin and ROAS decisions, use AOV net of VAT and excluding shipping charges, because neither is revenue you keep. Ad platforms and store dashboards often report gross order values, so label which version you are using. The gap is the VAT plus any shipping you charge, and only the shipping part remains where there is no VAT.
What is the difference between AOV and revenue per visitor?
AOV divides revenue by orders, so it only reflects people who bought. Revenue per visitor divides revenue by all sessions or visitors, so it combines AOV with conversion rate. An offer that raises AOV but lowers conversion rate can leave revenue per visitor flat or lower, which is why tests should track both numbers.
See how order value changes the ROAS you need with the free break-even ROAS calculator.