Average Order Value (AOV)
Total revenue divided by total orders. It tells you how much the typical customer spends in a single checkout. Raising AOV by even $5 can add thousands to your monthly profit without spending more on ads.
Example
Your store did $20K this month from 300 orders. AOV = $66.67. If you could bump that to $72 with a free shipping threshold or bundle, same 300 orders becomes $21,600.
Why It Matters
It's cheaper to get existing customers to spend more than to acquire new ones. A $5 AOV increase on 300 monthly orders adds $1,500/month in revenue with zero extra marketing spend — and because your fixed costs don't change, most of that drops straight to profit.
Pro Tip
Set your free shipping threshold at $10-15 above your current AOV. If your AOV is $66, offer free shipping at $79. Most customers will add a small item to qualify, and you'll see AOV climb within a week.
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