What is Average Order Value (AOV) and How To Calculate It?

Do you ever wonder if your shop could make more money without finding new people? 

The answer is a big yes!

It all starts with a simple number called Average Order Value, or AOV. While most Shopify merchants focus on getting new visitors and investing in SEO, AOV is the true hero that helps you grow your sales from the same traffic you are already getting.

But what exactly is the average order value?

What is Average Order Value (AOV)?

Average Order Value (AOV) is a metric that tells you the average amount a customer spends each time they place an order in your store. In simple terms, it answers one question: “How much is a typical order worth?”

An easy example: Imagine your Shopify store made $2,000 in sales last month. In that month, you had 100 orders. 2,000÷100=20. Your AOV for that month is $20.

AOV gives you helpful insights into how your customers shop, which products are frequently bought together, and can guide you in finding smart ways to encourage them to spend a little more each time.

How to calculate average order value?

Here's the formula for calculating Average Order Value (AOV):

Average Order Value = Total Revenue ÷ Number of Orders

To use this, pick a time frame, like one month. Take all the revenue you made in that time and divide it by the total number of orders.

Example:

Let’s say your store made $5,000 from 80 orders:

AOV=5000 ÷ 80

Your Average Order Value is $62.

AOV Examples: Two stores with the same revenue

Let’s say you have two clothing stores, Store A and Store B.

Both stores made the same amount of revenue in a month, $10,000. But these stores didn’t have the same amount of orders: Store A had 50 orders, while Store B had 25 orders.

By calculating AOV, you get:

Store A has an AOV of $200, while Store B’s AOV is $400.

That means customers at Store B are spending twice as much per order compared to those at Store A. 

This difference can say a lot. This confirms that total revenue doesn't tell the whole story! It’s a helpful insight when you're thinking about how to improve your sales and marketing strategy.

Why is AOV important for Shopify merchants?

For Shopify merchants, AOV is one of the easiest ways to grow revenue—often without spending more on ads or customer acquisition. Instead of chasing more traffic, you focus on getting more value from shoppers who are already buying.

1. Higher AOV Means More Revenue (and More Profit)

When customers spend more per order, revenue goes up. Often, profits go up too.

That’s because selling more items in one order usually costs less than acquiring a brand-new customer. A higher AOV creates extra cash flow, which you can reinvest into marketing, product development, or operations.

In short: bigger carts = healthier margins.

2. AOV Helps Cover Marketing and Fulfillment Costs

Every order has fixed costs:

• Ads and promotions to acquire the customer

• Shipping and packaging

• Labor and fulfillment

Increasing AOV helps balance these costs.

• More efficient growth: Raising AOV is often cheaper than driving more traffic.

• Avoid the “red zone”: If your customer acquisition cost (CAC) is higher than your AOV, you lose money on each sale. A good rule of thumb is for AOV to be at least 2× your conversion cost.

3. AOV Reveals How Customers Really Buy

AOV gives insight into customer behavior:

• Brand fit: If your brand positions itself as premium but AOV stays low, something may be off—pricing, messaging, or perceived value.

• Seasonal trends: AOV often rises or falls during certain months. These patterns help plan promotions and launches.

• Pricing signals: AOV data shows what customers are comfortable paying, helping guide pricing and bundling decisions.

4. AOV Guides Smarter Business Decisions

AOV is a powerful decision-making tool.

You can use AOV metrics to evaluate:

• Discounts and bundles

• Loyalty programs

• Upsells and cross-sells

If a campaign brings traffic but does not increase AOV, it may not be worth repeating. AOV helps you double down on what actually works.

How to Check AOV in Shopify?

You can find AOV in your Shopify admin under Analytics → Reports.

If you can’t see the Average Order Value report in your analytics, click the pencil icon in the top-right corner and drag the report onto your dashboard.