What is AOV?
Average Order Value
Average Order Value (AOV) is the average revenue per transaction. Calculated as total revenue divided by number of orders.
AOV = Revenue ÷ Number of ordersFashion/apparel: $60-$120 · Beauty: $40-$80 · Home goods: $80-$200 · Supplements: $45-$90
Why AOV matters
AOV is one of the four main levers in ecommerce (traffic, conversion rate, AOV, repeat rate). Raising AOV through bundles, upsells, and free-shipping thresholds has compounding effects on CAC efficiency.
Worked example
Plug a real number into the formula to see AOV in action:
Numbers are illustrative. Try our Customer LTV Calculator for your real numbers.
Common mistakes with AOV
- 1
Looking at single-channel ROAS in isolation instead of blended MER. Last-click attribution overweights bottom-funnel channels and starves top-of-funnel.
- 2
Setting a uniform target across products with different margins. A 2× ROAS is profitable on 80% margin and unprofitable on 20%.
- 3
Optimizing CAC without measuring LTV. Cheap customers with bad retention destroy unit economics.
How to improve AOV
Run incrementality tests every quarter to validate which channels actually drive new revenue vs steal credit.
Build a unit economics dashboard separating CAC, LTV, contribution margin, and payback by channel and cohort.
Establish a contribution margin floor for each channel — pause spend when margin drops below threshold for 14 days.
Common questions about AOV
What is AOV?▾
How is AOV calculated?▾
What is a good AOV benchmark?▾
Why does AOV matter for marketing teams?▾
Related terms
Need help applying AOV to your business?
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