What Is AOV (Average Order Value)? Meaning, Formula and Examples
AOV (Average Order Value) explained in plain English: what it means, why it matters, how to calculate or apply it, a worked example and common mistakes.
AOV (Average Order Value): The average value of each order. Raising AOV improves profitability per customer.
What AOV means
The average value of each order.
Why it matters
Raising AOV improves profitability per customer. Used alongside other metrics, it helps teams make better budget and strategy decisions.
How to calculate or apply it
AOV = revenue ÷ orders
Worked example
₹5,00,000 from 1,000 orders is ₹500 AOV.
Common mistake to avoid
Discounting so heavily that margin falls.
Related terms
Customer Lifetime Value (LTV)
The total profit or revenue a customer generates over the relationship.
ACoS (Advertising Cost of Sales)
Ad spend divided by ad-attributed sales on marketplaces.
TACoS (Total Advertising Cost of Sales)
Ad spend divided by total sales.
Buy Box
The main purchase button on a marketplace listing shared by multiple sellers.
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Frequently asked questions
Is AOV the same for every business?
No. Good values depend on your industry, margins, goals and data quality. Compare against your own history first.
Where can I see AOV?
Most values come from analytics, ad platforms, marketplace dashboards or your own sales records, depending on the metric.
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