What is Average Order Price and How it Matters

As an e-commerce store owner, Average Order Value (AOV) is one of the crucial metrics you’ll need to keep an eye on to evaluate your store performance and grow your business.

What is Average order value (AOV) ?

AOV tracks the average amount spent on each order.

AOV is determined using sales per order, not sales per customer.

Simply divide your store’s total sales by the number of orders and you will get the AOV of your store.

For example: 

Your total sales amount for August was RM5000.

The total number of orders from your lelong store for August was 100.

RM5000 / 100 = RM50

Based on this data, your average order value (AOV) during August was RM50.

This means that, on average, a customer will spend RM50 for each purchase from your store during August.

What can you do with the AOV calculated?

By learning how much your customers are spending on each order, you can then plan pricing and marketing strategies to improve it.

When you improve your average order value, you directly scale your profits and revenue growth upward. 

Eg. encourage your customers to buy more products or buy more expensive products (or both!) raise your AOV which in return increases your store sales.

How to improve your Average Order Value:

  • Bundling, upselling, and cross-selling additional products and services
      Upselling is the practice of encouraging customers to purchase a comparable higher-end product than the one in question, while cross-selling invites customers to buy related or complementary items
    • Adding a free shipping threshold (typically not too high above the average order value, but high enough to ensure you can afford it)

    • Giving a discount on minimum order values