What is Average Order Value (AOV), and how do you calculate it?
In short – The average value of orders placed on the platform.. A key marketplace metrics you should track.
Average Order Value (AOV) Formula
AOV = Total Revenue / Number of Orders
Average Order Value (AOV) calculates the average dollar amount spent per transaction on the platform. Increasing AOV can be achieved through cross-selling, upselling, and promotional strategies. This metric is crucial for understanding consumer behavior and optimizing pricing strategies. This metric provides deep insights into business performance, helping to identify trends, optimize strategies, and improve overall marketplace efficiency.
How can you find your Average Order Value (AOV)?
You should generally be able to calculate your Average Order Value (AOV) with tools you already posess. If that's not the case, signing up for an analytics tool may make sense.
Among others, twosided is one of the tools you could consider. Out-of-the-box, you'll get over two dozens marketplace KPIs and detailed tracking for your supply, demand and other factors that determine marketplace health.
Explore other metrics
Net Promoter Score (NPS)
A measure of customer loyalty and satisfaction based on user feedback.
Average Order Value (AOV)
The average value of orders placed on the platform.
Supplier Lifetime Value (SLV)
The projected revenue generated by a supplier over their tenure on the platform.
Repeat Purchase Ratio
The proportion of customers who make repeat purchases over a given period.
Customer Lifetime Value (CLV)
The projected revenue a customer will generate during their relationship with the business.