What Is Average Order Value (AOV)? Formula

How AOV Is Calculated

The formula is AOV = revenue ÷ number of orders. Pull both numbers from the same date range. Mix a month of revenue with a week of orders and you get a number that means nothing.

Example: a candle shop's March

Gross sales: $16,000
Discounts: $1,300
Shipping charged: $1,050
Orders: 210

AOV = ($16,000 − $1,300) ÷ 210 = $14,700 ÷ 210 = $70.

Now count shipping as revenue too: $15,750 ÷ 210 = $75. That's two AOVs for one shop in one month. Neither is wrong. They just count different things.

Don't mix up AOV and order value. Order value is what one customer paid on one order. AOV averages all your orders over a period.

What Shopify Counts in AOV

In your Shopify admin, go to Analytics > Reports and open Average order value over time. It shows how your AOV moves by day, week or month.

Shopify takes gross sales, subtracts discounts and divides by orders. Taxes and shipping stay out. So do changes made after the order was placed, like edits, exchanges and returns. The returns part trips people up. A month with lots of returns can still show a healthy AOV while your net sales drop. Google Analytics or an app's own dashboard may count revenue another way. Check what each tool includes before you compare two AOV numbers.

Why a Higher AOV Isn't Always Better

Lots of store owners think a rising AOV always means the store is doing better. It doesn't. AOV shows how big each order is, not how many orders came in.

Say the candle shop raises its free shipping minimum. AOV climbs from $70 to $78. But some shoppers won't add another item, so orders fall from 210 to 180.

Before: 210 orders × $70 = $14,700
After: 180 orders × $78 = $14,040

AOV went up $8, but the shop took in $660 less.

AOV also tracks revenue, not profit. A "spend $100, get $20 off" deal can make orders bigger while each one earns you less once product costs come out. And because AOV is an average, one huge order can drag it up. A single $2,000 wholesale order would move the shop's March AOV from $70 to about $79.

That's why you should read AOV next to your conversion rate and profit. Multiply conversion rate by AOV and you get revenue per visitor. It puts both sides in one number. If your conversion rate counts sessions, you get revenue per session instead.

What Moves AOV

The usual levers get shoppers to add a bit more to each order. You'll find the options, from bundles to free shipping minimums, in our guide to increasing average order value on Shopify. Picking an app? We compared the best Shopify upsell and cross-sell apps. Want to know how your number stacks up in your niche? Check these Shopify AOV benchmarks by industry.

Related Terms

Conversion Rate: the share of visits that turn into orders.
Revenue per Visitor (RPV): conversion rate and AOV rolled into one number.
Free Shipping Threshold: the minimum spend that earns free delivery.
Product Bundle: items sold together at one price.
Average Transaction Value (ATV): a similar number, used a lot in retail, that counts transactions instead of orders.
Customer Lifetime Value (CLV/LTV): what a customer spends with you over time, not just once.