Average order value (AOV): formula and calculation example

Average order value (AOV) shows the average value of orders in a defined set. Divide the value of those orders by the number of orders in the same set and period. The result is money per order, not money per customer or profit.

The AOV formula

AOV = total value of included orders ÷ number of included orders.

Before dividing, define what counts as order value. For example, you could use product sales after discounts and leave taxes and shipping out. Use the same order set in the numerator and denominator. If the included orders or adjustments change, the metric changes too.

A fictional order calculation

A store collects 28 October orders for its own analysis. In this hypothetical set, gross product sales total CLP 1,680,000 and discounts total CLP 280,000. For this calculation, the store excludes taxes, shipping, and later adjustments, and uses those same 28 orders in both parts of the equation:

AOV = (CLP 1,680,000 − CLP 280,000) ÷ 28 orders = CLP 50,000 per order.

The amounts and inclusion rule are fictional; they do not describe a real store. If a team puts all sales in the numerator, it also needs to count the orders that generated those sales. Dividing sales from one set by orders from another can produce an average, but it will not describe the orders included.

Why a report may show a different value

Each report defines its sales and orders. Shopify’s sales reports, for example, calculate AOV as gross sales minus discounts, divided by orders, excluding post-order adjustments. The same documentation says its sales reports include pending, canceled, and unpaid orders, so that population may differ from a custom set that excludes some statuses. Its formula describes that report; it is not a rule for every business. Read Shopify’s AOV definition and what its sales reports include.

When comparing periods or channels, record the currency, window, order statuses, and treatment of discounts, taxes, shipping, returns, and cancellations. Keep the same rules on both sides or record what changed.

An AOV of CLP 50,000 does not mean every order was worth that amount; some may be higher and others lower. It also does not show what remained after product cost, shipping, or other expenses. If one customer placed several orders, the average per order is not that customer’s average spend. In a customer lifetime value estimate, order value may be one input alongside purchase frequency and estimated relationship length; those projections bring their own assumptions.

The 28 orders, CLP 1,680,000 in gross sales, and CLP 280,000 in discounts are fictional. The order set is defined for this example and does not represent a platform’s default filter.

The cover is an AI-generated illustration.