Glossary
Average Order Value (AOV)
The average amount a customer spends in a single order, calculated as total revenue divided by the number of orders.
Average order value, or AOV, is the average amount a customer spends in a single order. You calculate it by dividing total revenue by the number of orders over the same period.
Total revenue / Number of orders = AOV
$4,000 revenue / 100 orders = $40 AOV
AOV matters because raising it is often cheaper than finding new customers. You have already paid to get someone to the checkout, so getting them to spend a little more on that same visit adds revenue without adding traffic cost. This is exactly why so many checkouts offer an order bump or an upsell right after you add something to the cart.
It also explains a pattern you have probably noticed in make-money-online offers. A product sold for $17 can still be very profitable to the seller, because the real business is the string of higher-priced upsells that follow. The $17 is the entry point, and the true AOV is much higher once the funnel does its work.
For your own numbers, watch AOV alongside your costs. A rising AOV means each order is worth more, which gives you more room to spend on ads or absorb fees. To see how order value fits the wider store math, read how ecommerce makes money and why online products have upsells.