AOV Formula: The Complete
Average Order Value Guide
Master the AOV formula with step-by-step examples, segmentation, and strategies to increase revenue per order.
The AOV Formula
Use the same time period for both revenue and orders.
All sales in the period. Exclude refunds or use net revenue consistently.
Count of transactions. Exclude cancelled and fully refunded orders.
Average revenue per order. Track over time and by segment.
Quick Example
Your store had $48,000 revenue and 600 orders last month.
AOV = $48,000 ÷ 600 = $80
Each order is worth $80 on average. Use this baseline to test shipping thresholds and bundles.
Track AOV by Segment
StoreRadar calculates AOV automatically for every customer segment, channel, and product category so you can see where to focus.
AOV Formula Variations
Different ways to calculate and use order value
The standard formula. Use same time period for revenue and orders.
Reveals which segments have higher or lower order values.
RPV = AOV × Conversion Rate. Combines order value and conversion.
Complements AOV; focus on units when pushing add-ons.
Use when you want to optimize for profit, not just revenue.
Worked Examples
Step-by-step AOV calculations
Basic AOV Calculation
Last month your store had $52,000 in revenue and 650 orders.
- 1 Total Revenue = $52,000
- 2 Number of Orders = 650
- 3 AOV = $52,000 ÷ 650
- 4 AOV = $80
Your average order value is $80.
Each order brings in $80 on average. Use this as a baseline to track the impact of upselling, bundles, and shipping thresholds.
AOV by Customer Type
Compare AOV for new vs returning customers.
- 1 New: $18,000 revenue ÷ 280 orders = $64.29 AOV
- 2 Returning: $34,000 revenue ÷ 370 orders = $91.89 AOV
- 3 Returning customers have 43% higher AOV
Returning customers have significantly higher AOV.
Focus on retention and repeat purchases. Consider loyalty programs or bundles to raise new-customer AOV toward returning levels.
Impact of a Free Shipping Threshold
Current AOV is $72. You introduce free shipping at $100. After 2 months, 35% of orders are $100+ and overall AOV is $89.
- 1 Previous AOV = $72
- 2 New AOV = $89
- 3 Increase = ($89 - $72) ÷ $72 = 23.6%
- 4 With 800 orders/month: +$13,600 revenue from same order count
AOV increased 23.6%; same orders now generate $13,600 more revenue per month.
Free shipping thresholds are one of the most effective AOV levers when set just above current AOV.
AOV in the LTV Formula
Your AOV is $78, customers buy 2.2 times per year, and average lifespan is 3 years.
- 1 AOV = $78
- 2 Purchase Frequency = 2.2 per year
- 3 Lifespan = 3 years
- 4 LTV = $78 × 2.2 × 3 = $514.80
Each customer is worth $514.80 in revenue over their lifetime.
A 15% AOV increase to $89.70 would raise LTV to $591.66—valuable for CAC payback and growth decisions.
AOV Benchmarks by Segment
Typical order values (ranges vary by price tier and region)
| Segment | Typical AOV | Notes |
|---|---|---|
| Fashion & Apparel | $80 - $150 | Varies by price tier |
| Beauty & Cosmetics | $50 - $90 | Often multi-item baskets |
| Electronics | $200 - $400 | Higher ticket, lower frequency |
| Home & Garden | $120 - $250 | Seasonal spikes |
| Food & Beverage (DTC) | $60 - $120 | Subscription skews higher |
| Jewelry & Accessories | $90 - $200 | Gift-driven peaks |
How to Improve AOV
Strategies to increase revenue per order
Free Shipping Thresholds
Set threshold just above current AOV to encourage adding one more item.
Product Bundles
Curated bundles at a slight discount increase units per order and AOV.
Upsells & Cross-sells
Relevant recommendations at cart and checkout increase attach rate.
Volume Discounts
10% off 2+, 15% off 3+ incentivizes multi-unit purchases.
Loyalty Tiers
Rewards for reaching spend tiers encourage higher order values.
Premium Options
Highlight higher-priced alternatives and premium variants.
Common AOV Mistakes
Errors that skew your average order value
Mixing Time Periods
Using quarterly revenue with monthly order count, or vice versa.
Always use matching periods: same month, quarter, or year for both revenue and orders.
Including Cancelled or Refunded Orders
Counting cancelled/refunded orders in the order count but excluding their revenue (or the opposite).
Exclude cancelled and fully refunded orders from both revenue and order count for a true AOV.
Ignoring Segmentation
Relying only on store-wide AOV and missing big differences by channel or customer type.
Calculate AOV by new vs returning, channel, and category to find levers.
Chasing AOV at the Cost of Conversion
Pushing heavy upsells or high thresholds that reduce conversion rate.
Track conversion rate and revenue per visitor. AOV up with conversion down can mean less total revenue.
How to Track AOV in WooCommerce
Three ways to monitor Average Order Value for your WooCommerce store
Option 1: Spreadsheets
Export orders and revenue from WooCommerce to calculate AOV manually. Requires regular exports and formulas to segment by channel or customer type.
- Full control
- No additional cost
- Time-consuming
- Quickly outdated
- No real-time segmentation
Option 2: WooCommerce Reports
WooCommerce's built-in reports show total revenue and order count, so you can compute overall AOV. Limited or no segmentation by customer type or channel.
- Built into WooCommerce
- No extra cost
- No segment-level AOV
- No trend breakdown
- Manual calculation
Option 3: StoreRadar
StoreRadar calculates Average Order Value automatically for every customer segment, channel, and product category—updated in real-time as orders come in.
- Automatic calculation
- Segment-level AOV
- Real-time updates
- Compare new vs returning
- Monthly subscription
Related Ecommerce Formulas
Metrics that connect to AOV
| Formula | Calculation | Relationship |
|---|---|---|
| LTV | AOV × Purchase Frequency × Lifespan | AOV is a direct input to Customer Lifetime Value |
| Revenue Per Visitor | AOV × Conversion Rate | Combines order value and conversion efficiency |
| Gross Profit Per Order | Total Gross Profit ÷ Orders | Profit view of order value |
| Conversion Rate | (Orders ÷ Visitors) × 100 | With AOV, determines revenue per visitor |
| CAC | Acquisition Spend ÷ New Customers | AOV and LTV inform whether CAC is sustainable |
Use the formula in practice
Frequently Asked Questions
Common questions about Average Order Value
The AOV formula is: AOV = Total Revenue ÷ Number of Orders. For example, if you made $45,000 from 600 orders in a month, your AOV is $45,000 ÷ 600 = $75. Use a consistent time period (month, quarter, or year) for accurate comparison.
A 'good' AOV varies by industry: fashion often $80–150, beauty $50–90, electronics $200–400, home goods $120–250. Focus on improving your own AOV over time. A 10–15% increase can significantly boost profitability without acquiring more customers.
It depends on your goal. Revenue-based AOV typically uses total revenue (including shipping if you charge it). For margin analysis, some teams use revenue after refunds. Be consistent: use the same definition across periods and segments.
LTV = AOV × Purchase Frequency × Customer Lifespan. AOV is a building block of lifetime value. Higher AOV with the same frequency and lifespan means higher LTV. Improving AOV improves both revenue per order and long-term customer value.
Yes. Segment AOV by acquisition channel, new vs returning customers, product category, and geography. You'll often find 2–3x differences between segments, which guides where to focus upselling and bundling efforts.
AOV is revenue per order (dollars). Basket size (or units per transaction) is the number of items per order. You can raise AOV by selling higher-priced items or more items per order. Track both to understand what's driving change.
Track AOV by Segment Automatically
StoreRadar calculates Average Order Value for every customer segment, channel, and product category—so you know where to focus next.
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