Enter the total revenue generated from orders and the total number of orders into the calculator to determine the average order value (AOV).

## AOV Formula

The following formula is used to calculate an average order value.

AOV = R / #O

• Where AOV is the average order value (\$/order)
• R is the total revenue generated from all orders within a time period (\$)
• #O is the total number of orders in the period

## AOV Definition

What is AOV?

AOV (average order value), is a financial term used to describe the average revenue generated per order or sale.

Why does AOV matter?

AOV is a key metric in understanding a business’s overall performance through all product offerings. This allows a business to compare the average order value to those of individual products to determine which ones are over-performing and which ones are under-performing.

## Example Problem

How to calculate AOV?

1. First, determine the total revenue generated through all orders in a time period.

For this example, the time period is 1 year and the total revenue generated from all orders in that year comes to be \$60,000.00.

2. Next, determine the total number of orders in the same time period.

Over the past year, this business made a total of 4,000 orders.

3. Finally, calculate the AOV.

Using the formula above, the average order value is found to be:
AOV = R/#O
AOV = \$60,000/4000
AOV = \$15 per order