Every business is aiming to increase their profits quickly and easily, and yours is no exception. You feel like you’re on the right track, but the numbers start to look a little stagnant. Someone recommends that you look into bumping up your AOV, and your response is...um, what’s AOV?

Well, you’re in the right place! Read on to learn

What does AOV mean?
How to calculate AOV
Why AOV matters
The three quickest ways to raise your AOV

What does AOV stand for?

AOV, or Average Order Value, is the average monetary amount customers spend when placing an order through your store. To calculate it, divide your total revenue by your number of orders received:

AOV = Revenue/Number of Orders

You won't want to stop at this calculation. Co-founder of marketing agency Common Thread Collective Taylor Holiday told Shopify that he recommends considering all three measures of central tendency for your orders:

mean (the average value of your orders, or AOV)
median (the middle value of your orders)
mode (your most common order value)

According to Taylor, it's particularly important to focus on your mode. It will tell you the most common dollar amount of orders from your store, which you can use as a starting point to keep discounts and up-sells appropriate. After all, your mode won’t factor in outliers that skew up your average.

Why does your AOV matter?

Simple: if your AOV goes up, so do your profits.

Once your customers are paying more on fewer orders, you'll be able to maintain or even raise your total revenue without increasing your order numbers. That way, you'll get a higher AOV and (surprise, surprise) a more profitable store.

How can you raise your AOV?

So how do you get your customers to buy more than they intended? And more importantly, how do you do it without spending the next year rearranging your entire business strategy?

There are plenty of long-winded answers. Many businesses create exclusive discounts, start first-time or limited period deals, or set up loyalty programs.

The thing is, a lot of these options require considerable time and effort. Effective discounts mean planning, time-sensitive offers need scheduling, and a loyalty program is a whole project of its own, requiring extra research and resources before you even get started.

Here are 3 of the fastest ways to raise your AOV!

If you’re already scrambling for time or handling too many facets of your business with too small a team, you can’t afford to add another massive project to the mix. These quick, easy ways to power up your AOV are here to take that weight off your shoulders while still bumping up your profits. Read through these time-tested strategies:

Add free shipping based on the order value
Create bundles
Up-sell or cross-sell

Founder of Lively Michelle Grant told Shopify, “Within two weeks of launching, [our bundles] became over 50% of our sales and has driven up our Average Order Value exponentially.” And according to Lisa Chu at Black n Bianco, quoted in an article from databox after implementing bundles of products for her store, "after adopting this strategy for our products, our AOV increased by more than 25%."

1. Add free shipping based on the order value

Many businesses, like Macy’s, guarantee free shipping when customers make a purchase of a minimum amount and add in a reminder as a banner to the top of their site.

2. Create bundles

Setting up bundles, like this lounge kit from Lively, is an easy and effective method of getting customers who were already interested in an included product to buy it all at once.

3. Up-sell or cross-sell

Up-selling, like Kent of Inglewood does with their blade packs, is an AOV-raising method where customers buy an upgraded version of the product they’re interested in. Cross-selling is the same, except instead of upgrading, the customer buys another related product along with their item of choice, like an accessory or extra.

Adding free shipping is first on this list because it’s the fastest and simplest of these options. It doesn’t even require any additional apps—you can do it right in Shopify. On the other hand, up-selling and cross-selling are a bit more complicated, only because you’ll often need to find the right Shopify app for the job.

A higher AOV is waiting! Take your next step to grow your business

Get started on a free shipping threshold with this Shopify guide
Install what you need to up-sell and cross-sell from this selection of Shopify apps
Create and manage bundles with this selection of Shopify apps
If you’ve already started bundling, Edit Order + Shopify Flow helps solve your fulfillment issues

What is AOV? A look into how to increase sales with less work