Average order value (AOV)

Average order value is sales revenue divided by the number of orders in the same period. Businesses use it to understand typical basket size, stating whether the calculation includes taxes, delivery charges and refunded orders.

The measure should use a consistent basis for revenue and completed orders, especially when refunds, taxes and delivery charges are involved. A higher AOV can result from larger baskets, higher prices or a changed product mix. Those explanations have different implications, so businesses often compare AOV with units per transaction and margin.

For example, £12,000 in qualifying revenue from 300 orders produces an AOV of £40. If an expensive product attracts a few large orders, the average can rise without most customers spending more. Conversion rate helps show whether a strategy that increases basket value also changes how often visitors buy.