Increasing your average order value (AOV) is a key metric for any e-commerce business looking to maximize revenue and grow their brand. AOV represents the average amount spent each time a customer places an order on your website. By implementing effective strategies to increase AOV, you can generate more revenue without necessarily acquiring new customers.

How Do We Calculate AOV?

Before we discuss ways to change our AOV we need to define it. Here is the formula to calculate your own AOV.

The AOV Formula

To calculate your average order value, use the following formula:
AOV = Total Revenue ÷ Number of Orders
For example, if your monthly revenue is $50,000 and you processed 1,000 orders, your AOV would be:
AOV = $50,000 ÷ 1,000
AOV = $50

Tracking your AOV over time will help you gauge the effectiveness of your efforts to increase it.

increase average order value

Let’s explore five proven strategies to boost your AOV and discuss how partnering with a third-party logistics (3PL) provider can help you achieve your goals.

Offer Free Shipping Thresholds

One of the most effective ways to increase AOV is by offering free shipping thresholds. Encourage customers to spend more by setting a minimum order value to qualify for free shipping. For example, “Spend $50 or more to get free shipping.” This incentivizes customers to add more items to their cart to reach the threshold, thereby increasing your AOV.

Create Product Bundles

Product bundling is another powerful strategy to increase AOV. By grouping complementary products together and offering them at a slightly discounted price, you encourage customers to purchase more items in a single order. This not only boosts your AOV but also provides value to your customers by offering them a curated selection of products.

Implement Cross-Selling and Upselling

Cross-selling involves suggesting related or complementary products to customers during their shopping journey, while upselling encourages customers to choose a higher-priced version of the product they’re interested in. Implement these techniques on your product pages, in the shopping cart, and during the checkout process to increase the likelihood of customers adding more items to their order.

Launch a Customer Loyalty Program

Rewarding loyal customers is a great way to increase AOV over time. Implement a loyalty program that offers points, discounts, or exclusive perks for repeat purchases. This not only encourages customers to shop with you more frequently but also incentivizes them to spend more per order to earn those rewards.

Provide Limited-Time Offers and Promotions

Creating a sense of urgency can be highly effective in increasing AOV. Offer limited-time promotions, such as flash sales or seasonal discounts, to encourage customers to make larger purchases. You can also provide bundle deals or gift with purchase promotions to incentivize higher order values.

Beginner’s Guide to Third-Party Logistics (3PL)

The world of e-commerce is always changing, therefore understanding the roll of Third-Party Logistics is integral to keeping up. In light of this our beginner’s guide to third-party logistics (3PL) will delve into the essential aspects, offering insights into fulfillment services, warehousing, and much more.

Read More…

Increasing your average order value is a critical component of growing your e-commerce business. By implementing strategies such as offering free shipping thresholds, creating product bundles, implementing cross-selling and upselling, launching a loyalty program, and providing limited-time promotions, you can encourage your customers to spend more per order. Partnering with a 3PL provider can further support your efforts to increase AOV by offering faster shipping options, optimizing your inventory management, and streamlining your order fulfillment process. By focusing on increasing your AOV and leveraging the expertise of a 3PL, you can unlock new growth opportunities for your e-commerce business and take your brand to the next level.

Interested in learning more about ways we can help you scale? Get in touch with one of our team today.

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