How to calculate average order value (AOV) step by step

Average order value is one of the most actionable e-commerce metrics—easy to calculate, directly tied to revenue, and improvable through specific tactics. Yet many store owners either don't track AOV or calculate it incorrectly, missing opportunities to increase revenue without acquiring additional customers. Understanding how much typical customers spend per transaction enables strategies encouraging larger purchases, reveals segment differences guiding personalization, and helps forecast revenue from traffic and conversion projections.

AOV optimization is often the fastest path to revenue growth. Perhaps your current AOV is $85—increasing it just 10% to $93.50 on 500 monthly orders generates $4,250 additional monthly revenue or $51,000 annually without a single new customer. This guide provides step-by-step instructions for calculating AOV correctly, understanding what it reveals, segmenting for insights, and implementing proven tactics to increase average transaction sizes strategically.

📐 The basic AOV formula

Average order value calculation is straightforward: divide total revenue by number of orders for a specific time period. The formula is AOV = Total Revenue / Number of Orders. This simple division produces the average monetary value of each transaction.

Here's a step-by-step calculation example. Imagine your store generated the following in March: Total revenue of $47,800 from 485 completed orders. Calculate AOV: $47,800 ÷ 485 = $98.56. This means the average customer spent $98.56 per order during March. Round to two decimal places for standard monetary precision.

Key calculation considerations:

• Use completed orders only: Exclude abandoned carts and pending orders

• Include all order components: Products, shipping, taxes in total revenue

• Consistent time periods: Match revenue and order timeframes exactly

• Exclude returns if calculating realized AOV: Subtract returned order values

Most e-commerce platforms calculate AOV automatically in analytics dashboards. Shopify, WooCommerce, BigCommerce, and others display AOV in standard reports. However, understanding the manual calculation ensures you can verify accuracy, calculate for custom segments, or work with exported data in spreadsheets.

Decide whether to include or exclude certain elements. Some businesses calculate AOV on product value only excluding shipping and taxes. Others include everything the customer pays. Be consistent in your methodology and clarify what your reported AOV includes to prevent confusion when comparing across time periods or discussing with team members.

📊 Finding your AOV in different platforms

Rather than calculating manually each time, use built-in analytics tools providing automatic AOV tracking. Here's where to find AOV in popular e-commerce platforms.

In Shopify, navigate to Analytics > Reports > Sales over time. The report displays total sales and order count, with average order value shown automatically. Alternatively, access Analytics > Dashboard for quick AOV overview with comparisons to previous periods. Shopify calculates AOV on gross sales including all order components.

For WooCommerce stores, go to WooCommerce > Analytics > Overview. The dashboard shows average order value among key metrics. Click on "Orders" tab for detailed order analysis with AOV breakdowns by time period. WooCommerce Analytics (available since WooCommerce 4.0) provides comprehensive AOV tracking with trend visualization.

In Google Analytics 4 (GA4) for any e-commerce platform, configure e-commerce tracking then navigate to Reports > Monetization > E-commerce purchases. GA4 displays "Average purchase revenue" which equals average order value. Use Exploration reports for custom AOV analysis by dimension like traffic source, device, or customer type.

BigCommerce users access Analytics in the control panel. Select date range then review average order value in the dashboard overview. Detailed reports under Analytics > Store Overview provide AOV trends with graphical visualizations showing changes over time enabling quick pattern identification.

🔍 Segmenting AOV for deeper insights

Overall AOV provides useful baseline, but segmented AOV reveals actionable patterns. Different customer types, products, channels, and time periods show dramatically different average order values guiding optimization strategies.

Calculate AOV by customer type comparing new versus returning customers. Perhaps first-time buyers average $76 AOV while returning customers show $112 AOV—47% higher. This pattern suggests returning customers trust your brand enough to make larger purchases. Strategy: convert first-time buyers into repeat customers who naturally spend more.

Segment AOV by acquisition channel revealing source quality. Perhaps organic search delivers $125 AOV, email marketing $108, paid search $87, and social media $68. These differences show organic and email bring customers willing to spend more per transaction. Budget allocation should favor high-AOV channels even if cost per click is higher—$0.80 CPC acquiring $125 AOV customer beats $0.35 CPC acquiring $68 AOV customer.

Valuable AOV segments include:

• Device type (mobile vs desktop vs tablet)

• Geographic region or country

• Product category or collection

• Time of day or day of week

• Discount code usage vs full price

• Payment method

Track AOV trends over time identifying patterns. Perhaps AOV increases during holiday season from $95 baseline to $145—seasonal spike from gift purchases of multiple items. Or AOV gradually declines from $105 to $98 to $92 over three months—concerning trend suggesting customers trade down to cheaper products or buy fewer items per order requiring investigation.

Compare AOV across product categories understanding value differences. Perhaps Electronics category shows $185 AOV while Accessories average $45. This 4x difference reflects natural price point variations but also suggests bundling opportunities—pair electronics with accessory cross-sells increasing overall transaction values.

📈 Strategies to increase AOV

Understanding AOV is valuable only if you act on insights to increase it. Numerous proven tactics encourage customers to add more items or choose higher-value products per transaction.

Implement free shipping thresholds just above current AOV. If AOV is $98, offer free shipping on orders $110+. Many customers add items to reach threshold, boosting order values. Perhaps this tactic increases AOV from $98 to $112—14% improvement. Display threshold prominently during shopping with messages like "Add $15 more for free shipping!" creating urgency to reach minimum.

Create product bundles offering multiple items at attractive combined pricing. Perhaps bundle three complementary products worth $135 individually for $115 bundle price. Bundles provide value perception encouraging larger purchases than customers might make separately. Test different bundle combinations identifying which resonate most with customers.

Use cross-sell recommendations suggesting complementary products. Display "Frequently bought together" or "Complete the look" recommendations on product pages and during checkout. Perhaps recommending phone case with phone purchase, or suggesting belt with pants. Effective recommendations increase AOV 8-15% by capturing incremental purchases customers hadn't considered.

Implement volume discounts encouraging quantity purchases. Perhaps offer "Buy 2, save 10%" or "Buy 3+, save 15%." While per-unit margin decreases, total order value and profit increase. Volume pricing works especially well for consumables or gift items where customers can justify buying multiple.

🎯 Advanced AOV optimization tactics

Beyond basic strategies, advanced tactics further optimize average order value through personalization, tiering, and strategic product placement.

Offer upsells presenting premium versions or upgrades. When customer adds standard product to cart, suggest premium alternative with clear value differentiation. Perhaps standard model at $85 versus premium at $125 highlighting additional features. Even if only 20% upgrade, AOV impact is significant—some orders jump $40 higher while others stay same, increasing average.

Create tiered loyalty programs where higher spending unlocks better benefits. Perhaps Bronze members save 5%, Silver (spending $500+ annually) save 8%, and Gold ($1,000+) save 12% plus exclusive perks. Tiered programs incentivize larger purchases to reach next tier, increasing AOV while building long-term loyalty.

Test checkout timing for cross-sell offers. Perhaps showing related products on product page converts 12%, during cart review converts 18%, but during checkout converts only 6% as urgency to complete purchase overrides interest in additions. Test different placement locations identifying where additional offers most effectively increase AOV without frustrating customers.

Implement personalized recommendations based on browsing history and past purchases. Machine learning algorithms analyze customer behavior suggesting products they're most likely to add. Perhaps customers who bought Item A have 35% probability of buying Item B—personalized suggestions to those customers increase AOV more effectively than random recommendations.

📊 Monitoring AOV impact from changes

Implementing AOV optimization tactics requires measuring impact to determine what works. Track AOV before and after changes, comparing test groups to control groups validating effectiveness.

Run A/B tests for AOV initiatives measuring incremental impact. Perhaps test free shipping threshold showing Variation A (threshold $110) versus Control (no threshold). After two weeks with sufficient sample, compare AOV between groups. If Control shows $98 AOV and Variation shows $107 AOV, threshold increased value $9 (9.2%)—clear success justifying permanent implementation.

Calculate revenue impact from AOV improvements. If increasing AOV from $98 to $107 on 485 monthly orders generates 485 × $9 = $4,365 additional monthly revenue or $52,380 annually. Compare additional revenue to implementation costs determining ROI. Perhaps bundle creation cost $800 generating $4,365 monthly—excellent 546% monthly ROI.

Monitor conversion rate alongside AOV ensuring optimization doesn't hurt conversion. Perhaps aggressive upselling increases AOV from $98 to $115 but reduces conversion rate from 3.2% to 2.7%—net negative if revenue lost from conversion decline exceeds revenue gained from higher AOV. Balance AOV optimization with conversion preservation.

Track customer satisfaction and return rates after AOV initiatives. Perhaps bundling increases AOV but also returns if customers feel pressured into unwanted purchases. Sustainable AOV growth maintains customer satisfaction—not just manipulating into larger purchases they regret. Monitor reviews and return reasons ensuring optimization enhances value rather than creates dissatisfaction.

Calculating average order value is straightforward—divide total revenue by number of orders—but the insights and optimizations AOV enables are powerful. By understanding the basic formula, finding AOV in your platform, segmenting for patterns, implementing proven tactics like free shipping thresholds and bundles, advancing to personalization and tiering, and carefully measuring impact, you systematically increase revenue per transaction without additional customer acquisition costs.

Skip the manual AOV calculations—get it automatically every day. Try Peasy for free at peasy.nu and receive daily reports showing your average order value with automatic week-over-week comparisons tracking whether your AOV is improving.