What is average order value (AOV)?
Average order value (AOV) is the average net sales per online order. It's calculated as DTC net sales, after discounts and returns, divided by the number of orders. AOV sets how much shipping, fulfillment, and customer acquisition cost each order can carry and still make money.
Formula
DTC (Shopify) net sales ÷ number of orders
Example
A hypothetical coffee brand's Shopify store did $300,000 of net sales across 4,000 orders in a month. AOV = $300,000 ÷ 4,000 = $75.
How to read it
Higher is generally better because fixed per-order costs like pick-and-pack and shipping get spread over more revenue. A higher AOV bought with deep bundle discounts or free shipping thresholds can still lower margin, so read it alongside contribution margin. Because this uses net sales, heavy returns or discounting pull AOV down even if customers put more in their carts.
What moves it
- Bundles, kits, and multi-pack pricing
- Free shipping thresholds
- Discount depth during promotions
- Product mix between hero items and add-ons
- Price increases, and returns or refunds that reduce net sales after the order is placed
What to do when it's flagged
- Check per-order fulfillment and shipping cost against the new AOV
- Test a free shipping threshold or bundle set just above the current AOV
- Review discount codes and promotion depth for margin leakage
- Look at whether product mix has shifted toward lower-priced items
How Inflection tracks it
Inflection's KPI Monitor tracks AOV without a default flag; thresholds are set per client based on their pricing and fulfillment costs.
DTC net sales and order counts come from Shopify, so AOV reflects the online store only, not wholesale or Amazon orders.
Updated 2026-10-11. Example figures are hypothetical.