Average Order Value (AOV): What It Is, How to Calculate It and How to Increase It

AOV, or average order value, is the average amount a customer spends per order. You calculate it by dividing your total revenue by your number of orders. If you made $30,000 from 400 orders last month, your AOV was $75. You increase it with offers that make a bigger order make sense for the customer, like post-purchase upsells, bundles and spend thresholds, not just with bigger discounts.

AOV is one of the simplest numbers in your Shopify dashboard.

It's also one of the easiest to push up the wrong way.

A bigger discount can raise your AOV and lower your profit at the same time. A threshold set in the wrong place can raise your AOV and lower your conversion rate.

So here's what AOV actually measures, how Shopify calculates it, and how we raise it without giving away margin.

By Emiel Dingemans, Founder of Magicianly

Updated October 2026

What Is AOV?

AOV stands for average order value. It's the average amount a customer spends each time they place an order with you.

It's one of the three numbers in the customer lifetime value formula, next to how often customers buy and how long they keep buying. That's why it matters so much for retention. Raise your AOV and every repeat order is worth more too.

How Do You Calculate Average Order Value?

Divide your total revenue by your number of orders.

AOV = total revenue ÷ number of orders

For example, if your store made $30,000 from 400 orders last month:

$30,000 ÷ 400 = $75

Your AOV for that month is $75.

Two things to decide before you compare numbers:

1. 1Which revenue you count. Before or after discounts? With or without shipping and taxes? Pick one definition and stick to it, or your AOV will move for reasons that have nothing to do with your customers.
2. 2Which period you look at. A month that includes a big sale will have a different AOV than a quiet month. Compare like with like.

It's also worth looking at AOV for new customers and returning customers separately. They often buy very differently.

How Does Shopify Calculate AOV?

Shopify calculates AOV as gross sales minus discounts, divided by the number of orders (Shopify Help Center).

Gross sales means product price times quantity, before taxes, shipping, discounts and returns. So Shopify's AOV:

• excludes shipping and taxes;
• subtracts discounts;
• excludes changes made after the order was placed, like edits, exchanges and returns.

That's why the AOV in Shopify might not match a number you calculate yourself from total sales. Neither is wrong. They just count different things. Know which one you're looking at.

What Is a Good AOV for Ecommerce?

There's no universal good AOV. It depends almost entirely on what you sell.

A brand selling a $20 consumable and a brand selling a product around £700 will never have comparable order values, and they shouldn't try to. Here's what retention looks like for a high AOV brand.

The only benchmark that matters is your own AOV over time. Is it going up or down, and why?

Is a Higher AOV Always Better?

No. Three ways a higher AOV can hide a worse result:

1. 1Discounts can inflate it. A "spend $150, save $40" offer raises your order value, but if it pushes people to spend more than they would have and you give away $40 to get there, you might have lost margin on every one of those orders.
2. 2Conversion can drop. An offer that raises AOV but means fewer people buy can bring in less revenue overall.
3. 3The next order matters more. For example, a customer who places one $150 order is worth less than a customer who places four $60 orders, which add up to $240. Don't trade repeat purchases for one bigger basket.

So when you look back at a sales event, check three numbers together: conversion rate, AOV and revenue per recipient. Then look at the structure behind the winner. Did the percentage off beat a dollar amount? Did a free gift outperform both? Did a spend threshold pull order values up?

How Can You Increase Your AOV?

Here are seven ways we use, starting with the ones that cost you the least margin.

1. Add a post-purchase upsell

Offer one relevant add-on after checkout: a complementary product, a refill, a bundle upgrade, an accessory or a frequently bought together item. It has to make sense with what they just bought, be frictionless and feel like a no-brainer.

Even a 10 to 20% take rate on a post-purchase upsell can make a real difference to your AOV. And it doesn't increase your ad spend at all. Same traffic, same conversion rate, more revenue.

2. Sell bundles and starter kits

Group products people already buy together. A bundle gives customers a reason to buy more in one go, and makes gifting easier.

3. Use a spend threshold

A free gift or free shipping once customers spend a certain amount gives them a reason to add one more item. Shopify itself lists setting minimum order thresholds for free shipping and promotions as one of the uses of the AOV metric (Shopify Help Center).

Set the threshold with your current AOV in mind. Too low and you give it away on orders you were getting anyway. Too high and nobody bothers.

4. Test how you frame the offer

The same discount can look very different. For example, if your AOV is $200, you could offer 10% off or $20 off. It's the same amount, but $20 off often has a higher perceived value. Always split test this for your own brand.

5. Add a minimum order to your discounts

Especially on winback discounts and store credit. You don't want someone using $17 in store credit to grab an $18 product. Base the minimum on your AOV and your margins.

6. Cross-sell after the first order

The best moment to sell a second product is after someone has bought and liked the first one. A Klaviyo cross-sell flow recommends the product that naturally comes next.

7. Push bundles or subscriptions instead of discounts

In your abandonment emails, if you sell replenishable products, bundles or subscriptions, offer "subscribe and save" or "bundle and save more" instead of a discount on a single item. It protects your margin and raises the order value at the same time. Here's how we set that up in a browse abandonment flow.

How Does Email Help Increase AOV?

Email is where most of these offers reach your customers. Bundles, thresholds, cross-sells and winback offers with a minimum order all live in your flows and campaigns.

But they only work if people see them. If your campaigns aren't getting opened, start with how to increase email open rates first.

What's the Difference Between AOV and Customer Lifetime Value?

AOV is what a customer spends on one order. Customer lifetime value is what they spend with you in total.

For example: an AOV of $50, two orders a year and three years as a customer is $50 × 2 × 3 = $300 in lifetime value.

That's why AOV is only one lever. You can also raise how often customers buy, which is where your repeat purchase rate comes in. Raising AOV is good. Raising AOV while you also get more repeat orders is how you grow your retention profitability.

So How Do You Increase Average Order Value?

• AOV = total revenue ÷ number of orders. Pick one definition of revenue and keep it.
• Shopify uses gross sales minus discounts, divided by orders, excluding shipping, taxes and later edits, exchanges and returns.
• There's no universal good AOV. Compare against your own numbers over time.
• Don't judge AOV alone. Check conversion rate, AOV and revenue per recipient together.
• Start with post-purchase upsells, bundles and spend thresholds, then test offer framing, minimum orders and cross-sells.
• Push bundles or subscriptions instead of discounts where you can.

A bigger order is good. A bigger order you didn't pay for in margin is better.