AOV (Average Order Value)
AOV is the average dollar amount spent per order, calculated as total revenue divided by total number of orders.
AOV tells you how much a typical customer spends in a single transaction. It's one of the three levers of customer lifetime value (along with purchase frequency and lifespan).
Raising AOV is often the fastest path to profitability because it doesn't require more traffic — you extract more value from existing buyers. Common tactics include bundles, upsells, cross-sells, tiered pricing, and free-shipping thresholds.
AOV also directly affects your break-even ROAS. A higher AOV with the same margin percentage means each order contributes more gross profit, lowering the ROAS you need to be profitable.
Formula
AOV = Total revenue ÷ Number of orders
Example
Related terms
LTV
LTV is the total revenue or profit expected from a single customer across their entire relationship with your brand.
ROAS
ROAS is the revenue earned for every dollar spent on advertising, expressed as a multiple (4x means $4 back per $1 spent).
Break-Even ROAS
Break-even ROAS is the minimum ROAS needed to cover product costs and fees — anything above it is profit on the contribution margin.
CVR
CVR (conversion rate) is the percentage of visitors who complete a desired action — a purchase, signup or lead — after clicking through to a landing page.