# Average Order Value

## What is Average Order Value?

Average Order Value (AOV) indicates the average amount of money spent on an order, either over a set period or over the lifetime of an e-commerce store. This is calculated by taking the total revenue and dividing it by the number of orders placed within the determined period.

### How to calculate Average Order Value

ƒ Sum(Revenue) / Count(Orders Placed)

### Example

Example 1: From Nov 1, 2020 to Nov 30, 2020 Company ABC had \$45,000 in Revenue over 450 orders. For this customer, the average order value in November is \$100 per order. Since the end of November is the typical busy season for an e-commerce business, This company can also look at the average order value over the month or compare weeks 1-3 with the last week in November. Example 2: Nov 1, 2020 - Nov 25, 2020 Company ABC had \$35,000 in Revenue over 400 orders. The average order value over this period is \$87.50 per order. After the holiday season started on Nov 26, 2021 - Nov 30, 2021, Company ABC had \$10,000 in revenue over 50 orders. The Average Order value over this period was \$200 per order. This means that Company ABC each year can expect a significant increase in average order value over the holiday period.