AOV = revenue ÷ number of orders
$36,400 ÷ 520 = $70
What should come out of the revenue figure first?
Refunds, GST and the shipping you charged. Take refunds out because that money went back. Take GST out because it was never yours, and because your gross margin is worked out without it, so the two numbers need to match. Take shipping out if your margin is worked out on the goods alone. Then check for one-off wholesale or corporate orders: a single $4,000 order from a resort can lift a month's AOV by several dollars and make an ordinary month look like a good one.
What does a $15 bigger basket do for a Sunshine Coast swimwear shop? (example figures)
An online swimwear shop run from a unit on the Sunshine Coast sells about 520 orders a month at an AOV of $70. Its gross margin is 50 percent after stock and postage, and each order that comes from Meta costs $28 in ads. The owner adds a matching cover-up as a bundle on every swimsuit page, and over a quarter the AOV rises to $85.
| AOV $70 | AOV $85 | |
|---|---|---|
| Gross profit per order at 50 percent | $35.00 | $42.50 |
| Meta ad cost per order | $28.00 | $28.00 |
| Left per order after ads | $7.00 | $14.50 |
| On 400 orders from Meta in a month | $2,800 | $5,800 |
The sale price rose by about a fifth. What each ad-driven order leaves behind more than doubled, because the ad cost stayed where it was. That is why AOV is one of the cheapest numbers to work on: Meta charged the same to bring each customer to the checkout, and the extra $15 arrived free of ad cost.
How do shops lift the average without discounting?
Two levers do most of the work. A free shipping threshold set a little above the current AOV (say $90 when the average is $70) gives a customer a reason to add one more thing. A bundle or a "goes with" item on the product page does the same at the moment of choosing. Both cost something, the shipping or the margin on the bundle, so work out the margin on the bigger order before you switch either on.
Discounts work against AOV. A 20 percent off code lifts orders and lowers what each one is worth, which can leave the shop busier and poorer.
Where does your average sale come into CoraVision?
Your average sale is one of the first things Cora asks for in the onboarding call, because CoraVision uses it to work out your lifetime value, the ceiling on what winning a customer can cost. Once Google Analytics 4 is connected, CoraVision reads purchases and revenue every night, the two numbers AOV is made of, so the figure you gave in the call can be checked against what the shop sold.
Questions
Is average order value the same as average sale?
It is the same idea under a shop's name. A trade or a clinic has an average job or an average invoice: total billed divided by jobs done. Whichever you call it, it is one sale, and lifetime value is every sale from one customer added together.
Should I look at the median order as well?
Yes, if a few big orders pull the average up. Ten orders of $50 and one of $1,000 give an average of $136, yet a typical customer spent $50. If your average and your median sit far apart, plan ads around the median customer and treat the big orders as a bonus.
Where do I find AOV in Shopify or Google Analytics?
Shopify's Analytics section has an average order value report, which you can view by day, week or month. Google Analytics 4 calls the same figure average purchase revenue. They will differ slightly, because each one counts refunds, tax and shipping its own way.