Average Order Value Explained
AOV measures average revenue per completed order.
Formula
Divide order revenue by completed orders.
Why it matters
AOV is useful for evaluating merchandising, bundles, upsells and free-shipping thresholds.
Do not isolate it
Higher AOV is not automatically better if margin, returns or conversion deteriorate.
Practical takeaway
Use the metric that matches the business question you are trying to answer. When several metrics describe different stages of the same workflow, compare them together rather than optimizing one in isolation.
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