Average Order Value — AOV — tells you how much money customers spend on average each time they place an order. The calculation is simple: divide your total revenue by the number of orders. If 5 customers place orders totaling 5,000 taka, your AOV is 1,000 taka.
Let's say you run an online store where customers typically buy 1 or 2 products per order. Some orders come in at 800 taka, others at 1,200, and some at 1,500. At the end of the month, you've made 50,000 taka from 50 orders. Your AOV is 1,000 taka. That number tells you exactly how much value you're getting per transaction.
Knowing your AOV is crucial for profitability. If it's too low, you might struggle to cover costs and turn a profit. That's why businesses use tactics to boost AOV — like offering free shipping above a certain threshold, creating bundle deals, or suggesting complementary products at checkout. Amazon does this masterfully with their "Frequently bought together" section. Small increases in AOV can dramatically impact your bottom line without requiring more traffic.