Average Order Value (AOV)
It is the average dollar amount a customer spends per order — online or in-store.
Formal definition
Average order value equals total revenue divided by the number of orders or transactions in the period.
Why it matters
Low AOV makes customer acquisition and shipping expensive; bundles and cross-sell lift profit per visit.
Where you see it
- Shopify and WooCommerce dashboards
- Amazon Seller Central business reports
- Retail POS transaction summaries
- E-commerce CRO and merchandising reviews
- Investor decks on unit economics
Worked example
- Revenue: $95,000.
- Orders: 1,900.
- AOV = $95,000 ÷ 1,900 = $50.
- Interpretation: Each order averages $50 in merchandise.
How Business metrics calculates it
Revenue ÷ Transactions.
Where people fool themselves
AOV including wholesale invoices next to $28 consumer orders will look like a luxury brand. Segment channels.
Run it on your own numbers: the Retail & E-Commerce calculator.