What is Average order value (AOV)?

AOV tells you how much each transaction is worth on average, independent of how many customers you attract or how often they buy. A higher AOV means you are earning more from each checkout without necessarily spending more on acquisition. Merchants track it over time and across segments - device, channel, or customer cohort - to spot where basket sizes grow or shrink. It is commonly used alongside conversion rate and purchase frequency to build a complete picture of revenue health.

How does average order value work?

• Divide total revenue for a period by the number of orders placed in that same period
• The result is your AOV for that window
• To raise AOV, merchants typically use product recommendations, bundles, volume discounts, or free-shipping thresholds that encourage shoppers to add one more item
• Comparing AOV across traffic sources or customer segments reveals which channels bring in higher-value buyers

Why does it matter?

A small lift in AOV compounds quickly because it applies to every single transaction. For an ecommerce store processing thousands of orders a month, even a few extra dollars per order can outpace the revenue impact of a meaningful traffic increase. Dealerships and high-consideration retailers use AOV as a proxy for whether shoppers are being guided to the right - and often higher-fit - products rather than defaulting to entry-level choices.

By helping shoppers surface complementary products and find items that better match their needs, an assistant like Nobi can support larger baskets and a higher AOV without requiring changes to pricing or promotions.

Frequently asked questions

What is a good AOV for an ecommerce store? There is no universal benchmark - AOV varies widely by category, price point, and business model. The more useful goal is a consistent upward trend in your own AOV over time, or AOV that grows faster than your customer acquisition cost.

How is AOV different from revenue per visitor? AOV measures the size of each order, while revenue per visitor factors in how often visitors actually convert. A store can have a high AOV but low revenue per visitor if its conversion rate is poor, so most operators track both together.

Does offering free shipping above a threshold reliably raise AOV? It often does, but only when the threshold is set just above the current AOV - typically 10 to 30 percent higher. If the threshold is too far above what customers naturally spend, many will not bother reaching it and you lose the effect.