What is Average Order Value (AOV), and how do you calculate it?
In short – The average monetary value of each order placed on the marketplace. A key marketplace metrics you should track.
Average Order Value (AOV) Formula
AOV = Total Revenue ÷ Number of Orders
Average Order Value (AOV) measures the average amount spent each time a customer places an order. It helps in understanding customer purchasing behavior and can guide strategies to increase revenue.
Increasing AOV can be achieved through upselling, cross-selling, or promotional strategies. A higher AOV contributes directly to increased revenue without the need to acquire new customers.
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
Order Frequency
Average number of orders placed by a buyer within a specific period
Cross-Sell Rate
Percentage of transactions that include additional products or services
Supply-Demand Ratio
Ratio of available listings to active buyers
Listing Quality Score
A metric evaluating the quality of product listings based on predefined criteria
User Net Adds
Net increase in the number of users over a specific period