AOV

Definition

AOV (Average Order Value) is the average amount of money a customer spends per order on an online store.

AOV is calculated using the formula: AOV = Total Revenue ÷ Number of Orders

Explanation

In dropshipping, AOV is a key metric used to measure how much each customer spends on average. Increasing AOV allows store owners to generate more revenue without increasing traffic, which is especially important when using paid ads.

Common ways to increase AOV include:

• Upselling higher-value products
• Bundling products together
• Offering free shipping thresholds (e.g., “Free shipping over $50”)
• Adding cross-sell recommendations at checkout

A higher AOV can improve profitability by spreading advertising costs over larger order values.

Example

A dropshipping store generates $5,000 in revenue from 100 orders.

AOV calculation: $5,000 ÷ 100 = $50

This means the average customer spends $50 per order.

Key Takeaway

AOV helps dropshipping stores understand customer spending behavior and optimize strategies to increase revenue per order.