How Average Order Value (AOV) Works
AOV equals total order revenue divided by number of orders.
A Simple Example
If 200 orders generate $100,000 in revenue, average order value is $500.
Why Average Order Value (AOV) Matters
AOV helps explain revenue changes and informs acquisition limits, merchandising and promotion strategy.
Common Misreading
A higher AOV is not automatically more profitable. Discounts, product mix, shipping and margin can increase revenue per order while reducing contribution.