10 ways to increase Average Order Value for eCommerce businesses

Do you know one of the easiest ways to tell if your eCommerce merchantry has grown over the years or not? It is to squint at your “Average Order Value”.† Along with profit margin, consumer vanquishment forfeit and conversion rate, AOV should moreover be a key performance indicator that you should be tracking.

In simple words – It’s not just important to see who is ownership what. It is moreover important to see if the same person trusts you unbearable to buy increasingly and increasingly from you.

This is a vital concept in the world of eCommerce and is most often ignored. Let us unravel it lanugo for you.

What is Stereotype Order Value in eCommerce?

Average Order Value (AOV) in eCommerce is the stereotype value of money customers are spending on each purchase made through your eCommerce platform.

It is a key metric that helps businesses understand the purchasing patterns and behaviours of their customers.

What is the Stereotype Order value formula?

To summate Stereotype Order Value (AOV) in eCommerce, you need two key pieces of information: the total revenue generated and the total number of orders.

The formula for gingerly AOV is:

AOV = Total Revenue / Total Number of Orders

Here’s a step-by-step guide on how to summate AOV:

  1. Determine a specific time period: Decide on the time period for which you want to summate the AOV. It could be a day, week, month, quarter, or year, depending on your preference and the level of detail you require.
  2. Gather the total revenue: Sum up the total revenue generated during the chosen time period. This includes all sales, excluding taxes, shipping costs, or any other spare charges.
  3. Count the total number of orders: Determine the total number of orders placed within the selected time period. Each completed transaction counts as a separate order, regardless of the number of items or services purchased in each order.
  4. Calculate the AOV: Divide the total revenue by the total number of orders. The resulting value will be your Stereotype Order Value.

For example, let’s say you want to summate the AOV for the month of January. During that month, your total revenue was 10,000, and you had 200 orders. Using the formula:

AOV = 10,000 / 200 AOV = 50

In this case, your Stereotype Order Value for January would be 50.

Remember to recalculate the AOV regularly to track changes over time and evaluate the effectiveness of your strategies aimed at increasing AOV. Your target should be to slowly increase this AOV value.

The importance of Stereotype Order Value in maximising eCommerce profits†

Understanding and keeping track of your AOV from early on gives you unrepealable advantages in the game. Some of these benefits are:

Revenue growth

As your AOV grows, so will your revenue.

By encouraging customers to spend increasingly per transaction, your online merchantry can generate increasingly sales without necessarily acquiring new customers.

This ways increasingly money is flowing into the business, driving overall growth and profitability.

Related read:†Retention Marketing: The Secret Sauce for Repeat Customers

Cost optimization

Increasing AOV can help offset the financing associated with acquiring new customers.

Our co-founder Ankur Sharma, in his yack with Blissclub Chief Revenue Officer – Soumen Samanta highlight the biggest pain point for D2C trademark owners today – Consumer vanquishment financing (CAC).

These can be substantial, including marketing expenses, razzmatazz campaigns, and sales efforts. But if your AOV increases, your merchantry gets increasingly resources to work with for marketing and vanquishment investments.

Not only that, you understand consumer behaviour and you can implement marketing strategies increasingly efficiently.

Enhanced Consumer Lifetime Value (CLV)

AOV is closely related to Consumer Lifetime Value (CLV), which represents the total value a consumer brings to a merchantry over their unshortened relationship. Here is a guide by Mezchip on customer lifetime value.

Customer retention

By increasing AOV, businesses can moreover increase CLV. When customers spend increasingly per transaction, they contribute increasingly to the business’s long-term revenue, making them increasingly valuable over time.

Improved Margins

In the end, without all it’s all a part of “Dhanda” and profit has to be your north star.” AOV can impact profit margins by permitting businesses to largest utilize their resources.

With higher stereotype order values, businesses can imbricate stock-still costs, such as overhead expenses, increasingly efficiently. This leads to improved margins and a healthier marrow line.

Related read:†Top 15 high-profit margin products to sell online in India (2023)

Increased Consumer Satisfaction

While AOV is primarily a financial metric, it can moreover contribute to consumer satisfaction.

When customers finger they are getting value for their money, they are increasingly likely to have a positive perception of your merchantry and their overall experience. This can lead to consumer loyalty, repeat purchases, and positive word-of-mouth, remoter driving revenue and profits.

How to increase stereotype order volume in eCommerce

1. Offer product bundles

Create product bundles or packages that combine complementary products on your online store.

By offering bundled deals at a slightly discounted price compared to purchasing each item separately, you can entice customers to spend increasingly to get a largest overall value.

As an eCommerce seller on Instamojo, you can offer your customers product bundles at a discounted price to encourage customers to buy more.

2. Cross-Selling

Train your sales or consumer service teams to powerfully upsell and cross-sell during consumer interactions.

Encourage them to suggest higher-priced or upgraded options, relevant add-ons, or complementary products that enhance the customer’s original purchase.

For example, a consumer is ownership a camera from you. You can offer a camera, a camera specimen and a camera stand. Ownership all of this will increase your AOV.

Personalize recommendations based on consumer preferences and ownership history.

3. VolumeDiscounts

Implement volume-based discounts to incentivize customers to buy in larger quantities. For example, offer tiered pricing where customers receive a unbelieve when they purchase multiple quantities of a product.

This encourages customers to spend increasingly to save more. (Seems contradictory, but works we promise!

Related read:†Offering festival discounts? Here’s how to do it right

4. Self-ruling shipping thresholds

Set a minimum order value for customers to qualify for self-ruling shipping.

This encourages customers to add increasingly items to their cart to reach that, increasing their AOV.

Pro tip: Make sure the threshold is strategically set to wastefulness consumer motivation and your shipping costs.

5. Value-Added Services

Offer value-added services or premium options that customers can add to their purchases for an spare fee.

Now, with custom fields on Instamojo, you can ask your customers for their preferences and special requests that you can tuition an spare fee for!


6. Limited-Time promotions

Create limited-time promotions, such as “buy one, get one free” or “buy more, save more” offers.

These time-sensitive deals create a sense of urgency and FOMO, motivating customers to spend increasingly to take wholesomeness of the offer.

7. Loyalty programs

Implement a loyalty program that rewards customers for reaching specific spending milestones.

Offer sectional discounts, self-ruling gifts, or wangle to VIP events to incentivize customers to spend increasingly to unlock these benefits. This encourages repeat purchases and higher stereotype order value in eCommerce.

Related read:†mojoPlus Rewards: Stop paying and redeem loyalty points!

8. Post-Purchase follow-Up

After customers make a purchase, follow up with personalized recommendations, related products, or sectional offers.

By maintaining a connection with customers, you can encourage them to make spare purchases and increase their AOV in the long run.† ebook for repeat customers


Want increasingly tips and tricks to build a relationship with your consumer post-purchase?


Download our self-ruling eBook “Don’t be a one-hit wonder”!†


9. Product recommendations

Leverage data and analytics to provide personalized product recommendations to customers based on their browsing and purchase history.

You can exhibit these recommendations prominently on your website or include them in email marketing campaigns like this one by Skim City.

10. Cross-channel promotions

Promote products or offers wideness variegated channels, including social media, email marketing, and your eCommerce website.

Consistent trademark language and coordinated campaigns can create a sense of excitement and encourage customers to explore increasingly products or services, thereby increasing their AOV.

Do you have increasingly ideas on how to increase the AOV for customers? Let us know in the comments.

For now – Happy Selling!

P.s. Haven’t started selling from your own online store yet?†

Sign up on Instamojo