Customers and pricing
AOV (average order value)
Revenue divided by the number of orders.
Facts checked against sources onWhat does AOV (average order value) mean?
Average order value is revenue divided by the number of orders in a period. Online retailers split revenue into visitors × conversion rate × AOV.
Where does it come up in case interview prep?
- Unit economics in any businessLesson in How industries work: the toolkit
- Industry primers: retail, consumer goods, banking, telecomLesson in Business basics for non-business learners
- The funnel and conversion maths: reach, consideration, trial and repeatLesson in Customers and growth: the economics of marketing
- How e-commerce and marketplaces make moneyLesson in E-commerce, marketplaces, and quick commerce
- Unit economics and subscription businessesLesson
- How internet platforms, marketplaces, and digital ads workLesson in Internet platforms, marketplaces, and digital advertising
- Beauty economics: from the shelf price to the brand's profitLesson in Beauty and personal care: cosmetics, skincare, haircare and fragrance
Related terms
- ARPU (average revenue per user)Revenue divided by the average number of users.
- TAM, SAM and SOMTotal market, the part you can serve, and the part you can win.
- Market shareOur sales as a share of total market sales.
- Relative market shareOur share divided by the largest competitor's share.
- Penetration rateThe share of potential customers who already use the product.
- Share of walletOur share of what one customer spends in the category.
- CAC (customer acquisition cost)What it costs, on average, to win one new customer.
- CLV (customer lifetime value)The profit a customer is expected to bring over the whole relationship.
Learn it in context
See AOV (average order value) at work in a lesson from How industries work: the toolkit, with checks as you go.
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