What is average order value?
AOV is total revenue divided by order count, used to understand basket size and margin pressure.
Direct answer
Average order value shows how much revenue each order produces on average, but it should be read with margin, discount, and return data.
Why this matters
A higher AOV can support higher CAC, but only if the added revenue carries enough contribution margin.
What to check
Use this term as an operating checkpoint, not just a glossary definition.
- Measure AOV before and after bundles, discounts, and free shipping thresholds.
- Check whether higher AOV also raises refund or shipping cost.
- Segment AOV by channel and product type.
Common mistake
Raising AOV with heavy discounts can reduce profit even when revenue per order looks better.
FAQ
What is a good AOV?
A good AOV is high enough to support acquisition cost and fulfillment cost while preserving contribution margin.
How can a store increase AOV without hurting margin?
Use bundles, add-ons, threshold gifts, and merchandising that increase perceived value instead of blanket discounts.
Should AOV be tracked by traffic source?
Yes. Different sources bring different intent, product mix, and discount sensitivity.