Definition
Average Order Value (AOV) is the average amount a customer spends per transaction. It is calculated by dividing total revenue by the number of orders in a given period.
Detailed Explanation
AOV = Total Revenue ÷ Number of Orders
Increasing AOV is often cheaper than acquiring new customers. Tactics include upsells, cross-sells, bundles, free-shipping thresholds, and volume discounts.
AOV directly affects ROAS break-even: higher AOV means you can afford a higher CPA/CPC while remaining profitable.
Nepal Context
Daraz and local e-commerce stores in Nepal see AOVs from NPR 500 (impulse FMCG) to NPR 15,000+ (electronics). COD-heavy markets often have lower AOV due to smaller trial orders — encouraging wallet pre-payment with discounts can raise AOV.
Practical Examples
- NPR 200,000 revenue from 80 orders → AOV = NPR 2,500
- Add “Complete the look” cross-sells on product pages to raise the number of items per order.
- Set free delivery at NPR 2,000 when current AOV is NPR 1,600 to nudge basket size.
How to Check It
- In GA4, open Reports → Monetization → E-commerce purchases or build an exploration with revenue and transactions to calculate AOV by month.
- Calculate AOV separately for COD and prepaid orders; a large gap shows where payment incentives might help.
- Exclude cancelled and returned orders, which inflate AOV if left in.
Key Takeaways
- AOV = revenue per order; track weekly and by traffic source.
- Raising AOV improves unit economics without increasing ad spend.
- Segment AOV by new vs. returning customers — they behave differently.
Common Mistakes
- Optimizing AOV with aggressive upsells that hurt conversion rate — net revenue may drop.
- Ignoring shipping and discount impact — net AOV after discounts matters.
- Using AOV alone for profitability — margin per order is the real metric.

