AOV (Average Order Value)

Why it matters

A higher AOV can offset lower order volume and directly improves CAC payback, since each transaction covers more of the cost it took to acquire that customer. Investors watching a marketplace or e-commerce business will track AOV alongside order volume to understand where growth is actually coming from.

How to calculate it

Divide total revenue, or GMV for a marketplace, by the number of orders placed over the same period. Decide upfront whether cancelled or refunded orders are included, and whether shipping and fees count toward the order value, then apply that definition consistently.

Worked example

A platform processes $340,000 in GMV across 4,000 orders in a month. AOV equals 340,000 divided by 4,000, which is $85 per order.

What affects AOV

AOV varies enormously by category, from a few dollars for a convenience app to thousands for a B2B procurement platform, so there is no universal benchmark. Track the trend over time and segment by customer type, since new customers often order smaller amounts than repeat customers who trust the platform more.

Common mistakes

Including cancelled or refunded orders in the calculation, which inflates AOV without reflecting revenue you actually kept.

Not segmenting new versus repeat customers, which hides whether AOV growth is coming from existing customers spending more or from a shift in what kind of new customer you are acquiring.

How to show it in your deck

On the traction slide, show AOV with its trend and, if relevant, a comparison to category benchmarks, for example: AOV $85 (+12% year over year), 2.3 items per order.

Formulas

Frequently Asked Questions

Related Terms