AOV.
aka average order value, average basket, basket size
How much a customer spends each time they check out.
What it actually means
AOV, average order value, is total revenue divided by the number of orders in a period. It tells you the size of a typical basket. Because the cost of shipping, packing and winning the click is roughly the same for a small order as a large one, raising AOV is one of the most direct routes to profit.
A store with US$50,000 in sales from 1,000 orders has an AOV of US$50. If shipping and handling cost US$7 an order, that is 14% of revenue. Lift AOV to US$70 and the same US$7 is 10%.
AOV is set mostly by what you sell and where. A furniture store and a phone-case store are not comparable. Compare your AOV with your own last quarter, and read it next to conversion rate: a change that raises basket size and scares off buyers is not a win.
Where you'll hear it
AOV is up from 48 to 55 since we moved the free-shipping threshold to 60.
Translation: people are adding one more item to avoid paying for delivery, which is exactly what the threshold was for.
Also on every store dashboard, in pricing and bundling discussions, and whenever someone proposes free shipping and someone else asks who is paying for it.
The pop-culture version
The burger was already sold. The customer was already at the counter. One question, costing nothing, adds a side and a drink to a large share of orders.
No new customer was found. No advert was bought. The same visit simply became worth more. Fast-food chains built fortunes on that sentence.
Bundles, quantity discounts, “complete the look” and free-shipping thresholds are the online version of the fries question.
The cheapest sale is the extra item sold to someone who is already buying. That is all AOV optimisation is.
Say it like you mean it
“AOV rose 12% with conversion flat, so revenue per session is up 12%.”
Shows the basket grew without costing orders.“AOV is 80, which is great.”
Great compared with what? Without the category, the trend and the conversion rate, 80 means nothing.Pair AOV with conversion rate every time. Multiply them and you get revenue per visit, the number that actually pays the bills.
Fifteen KPIs with formulas and 2026 benchmarks, including how to read AOV properly.
Decoded next
Decoded by the Kurums editorial team. Kurums Decoded translates the language of business for people who are new to it. Definitions are kept short on purpose; the serious version above goes deep. Nothing here is financial, legal or career advice.
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