Average order value is revenue from the selected orders divided by the number of those same orders over the same period. CFI describes average purchase value as revenue divided by purchases.[1] The denominator is orders, not visitors, customers or units sold. State whether revenue is after discounts and returns, and how tax and shipping charges are treated.
A merchant might use this measure to evaluate a bundle or free-shipping threshold. A higher order value is not automatically better: extra discounts, heavier parcels or fewer completed orders could offset the gain. Examine margin and conversion alongside it. Compare like-for-like periods so a shift towards expensive product categories is not mistaken for an improvement in basket building.
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Compiled with AI assistance using public sources. General explanation, not individual legal or tax advice. Describing a concept does not mean Zoloo offers it as a feature.