# Average order value (AOV)

> Average order value (AOV) is the average amount a customer spends each time they place an order, calculated by dividing total revenue by the number of orders in a given period. It is one of the three core levers on ecommerce revenue, alongside conversion rate and traffic volume.

_Source: https://nobi.ai/glossary/average-order-value_

## 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](https://dashboard.nobi.ai) 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.