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Measurement and metrics

AOV (Average Order Value)

Also called average order value, AOV, average basket value, average transaction value.

Short answer

AOV (Average Order Value) is the average value of an order: total revenue divided by the number of orders in the same period. AOV determines how much a percentage-based commission is actually worth per sale.

Definition of AOV (Average Order Value).

AOV measures how much is bought per order on average. The figure is calculated over a period and says something about the size of the basket, not about how many people buy. Two stores with the same number of orders can have very different revenue simply because one of them gets accessories added to the basket.

For an affiliate, AOV is the figure that translates a commission rate into money. 8 % of an average order of DKK 350 is DKK 28; 8 % of an average order of DKK 2,400 is DKK 192. Compare two programs on the percentage alone, without knowing their AOV, and you are comparing nothing.

For the store, AOV is one of three levers on revenue, alongside traffic and conversion rate. It is often the cheapest one to move: a customer who has already decided to buy costs nothing extra to persuade to add one more item to the basket.

How it is calculated

AOV = total revenue ÷ number of orders

total revenue
the value of all orders in the period, excluding VAT and shipping
number of orders
the number of completed orders in the same period – not the number of items and not the number of customers

Example

Revenue
DKK 184,000
Orders
460
AOV
DKK 400

An AOV of DKK 400 means each order brings in DKK 400 on average – and that a commission of 8 % is worth DKK 32 per sale.

How to move AOV

The four classic levers are upselling accessories, volume discounts, free shipping above a threshold, and bundles of products that belong together. The shipping threshold is the most direct: set it slightly above the current AOV, and some customers add one more item to the basket to reach it.

The average, however, hides its own distribution. A single order of DKK 40,000 among 500 orders of DKK 300 moves AOV from DKK 300 to DKK 379 without saying anything about what the typical customer does. Look at the median alongside it when individual orders are very large.

AOV alongside the other metrics

AOV on its own does not tell you whether a traffic source is good. Multiplied by the conversion rate and the commission rate, however, it gives what a click is worth – the figure EPC measures directly. An affiliate who knows both can decide whether low traffic with large baskets beats high traffic with small ones.

For the store, AOV is tied to how much it can afford to pay to acquire a customer. If AOV rises, the channel can bear a higher commission rate at the same contribution margin. If it falls without the rate being adjusted, the sales affiliates deliver gradually become more expensive than they are worth.

AOV vs. LTV

AspectAOVLTV
MeasuresThe value of an order on averageThe value of a customer over the whole relationship
Time spanA defined periodThe customer's entire lifetime
Used forTranslating a commission rate into money per saleJudging how much a new customer may cost
CertaintyActually measuredPartly an estimate about the future

Use AOV when you calculate on the individual sale, and LTV when you calculate what a customer may cost to acquire.

How it goes wrong

  • 01

    AOV calculated including VAT

    If the average is calculated including VAT while commission is calculated excluding VAT, earnings per sale are overestimated by 25 % (at Danish VAT of 25 %). Keep both figures in the same unit.

  • 02

    Shipping counted in the order value

    Shipping rarely earns commission. If it is included in AOV, the average looks higher than the amount commission is actually calculated on.

  • 03

    Measuring period too short

    AOV measured over a campaign week is not the store's normal level. Use at least a month, and leave campaign weeks out when comparing programs.

At Affilyflow

AOV (Average Order Value) in practice

Via Stripe, the WooCommerce plugin and the code in the installation guides, commission on Affilyflow is calculated on the order value excluding VAT, so the AOV you calculate commission on is the same figure the store books. Via the Shopify app, commission is calculated on the value of the items without shipping, where it is not yet confirmed whether VAT has been deducted. The same order can never count twice – duplicates are checked on order or invoice ID per program – so the order count in the denominator does not become artificially high.

Frequently asked questions

How do you calculate AOV?

AOV is calculated by dividing total revenue in a period by the number of orders in the same period. If a store has sold DKK 184,000 across 460 orders, AOV is DKK 400. Use amounts excluding VAT if the figure is to be compared with a commission calculation.

What is a good AOV?

There is no general level, because AOV follows the industry. Electronics is high, groceries are low, and a subscription has an AOV that corresponds to one period's payment. Only compare with the store's own previous level or with programs in the same category.

Why does AOV matter to an affiliate?

Because a percentage-based commission is calculated on the order value. 4 % of an average order of DKK 2,000 gives DKK 80 per sale, while 10 % of an order of DKK 300 gives DKK 30. AOV determines which percentage is really the best.

Is AOV the same as average basket value?

Almost, but not quite. Basket value is typically measured on started baskets, including those that never become an order. AOV is measured only on completed orders and is therefore the figure that can be compared with commission and revenue.

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