How to Increase Average Order Value in E-commerce: 6 Proven Strategies

Most e-commerce sellers waste a major part of their efforts on gaining traffic with more advertisements, more search optimization, and more content. While it might be worth getting heads in the door to your store, there is an easier method of growing revenue that does not require a larger advertising budget, and that is getting every customer to increase the amount they spend per order.

Consider this:

100 orders x $30 AOV = $3,000

100 orders x $50 AOV = $5,000

Same customers. Same ad spend. $2,000 more in revenue. That gap is exactly what AOV optimization is about, and this article discusses six strategies that you can employ to ensure that it happens.

What Is Average Order Value (AOV)?

Average Order Value (AOV) measures the average amount a customer spends per transaction.

Formula: Average Order Value = Total Revenue ÷ Total Number of Orders.

If your store earned $20,000 from 500 orders last month, your AOV is $40. 

The significance of this metric, however, is related to the way it connects to everything else. The greater the AOV, the greater the profit per sale, and therefore, your advertising expenses become easier to cover. It improves your return on ad spend without changing a single campaign. Also, customers with higher order values often generate higher lifetime value, which increases with time.

The bottom line: optimizing AOV helps increase revenue, without the need to add more customers. That is the most efficient lever of growth available to most stores.

Why Increasing AOV Is One of the Fastest Ways to Grow E-commerce Revenue

Acquiring new customers is expensive, and the cost continues to rise. According to data from Mobiloud, the cost of acquiring customers for e-commerce sellers has increased by an average of 40% in the period between 2023 and 2026. In 2025, the average cost per lead on Meta reached $27.66, more than 20% higher than the previous year, while conversion rates declined instead. Google Ads CPC increased by 12.88% in comparison with the previous year, and shopping advertisements skyrocketed by 33.2%.

With the marginal cost of acquiring new customers higher, it is a very smart move to generate more revenue from existing customers. 

The stores that are profitable pay attention to three metrics together, which are conversion rate, average order value, and customer lifetime value. Traffic brings visitors to your store. The conversion rate turns them into customers. AOV measures how much each customer spends per transaction. While customer lifetime value measures the long-term value of each customer. The three need to collaborate to achieve high profit margins.

Example: If a store completes 1,000 orders in a month with an AOV of $45 and has a revenue of $45,000, increasing that AOV to $60 will see the store grossing $60,000. Fifteen thousand dollars additional monthly, with no additional traffic needed.

Bundle Complementary Products to Increase Cart Value

Example of a skincare product bundle from The Ordinary

One of the easiest ways to have customers spend more per order is through product bundling. Rather than having a list of individual items, you put together groups of products that naturally go together and offer them as a package, which is usually sold at a slight discount compared to buying each item individually.

A skincare brand may offer a cleanser, toner, and moisturizer in the form of a complete routine. A case, screen protector, and cable may be sold together in a phone accessories store. A fitness retailer can sell bands, a mat, and a carry bag as a starter pack.

The reason why bundles work is that they do two things simultaneously. They increase perceived value, which makes customers feel that they are on a deal. And they reduce decision fatigue, since instead of browsing multiple items and deciding which ones to choose, the customer is presented with a simple, ready-made package that makes sense.

Another hidden advantage is that bundles help move slow-moving inventory. Have a product that cannot sell itself quite effectively but is just naturally compatible with one of your best-sellers? Put them together. The popular product helps sell the slower-moving item, and you sell the stock while you increase the order value.

Seasonal or limited-time bundles add urgency too. A "Summer Starter Pack" or a "Valentine's Gift Bundle" will provide customers with an incentive to buy now and spend more.

Set a Free Shipping Threshold

Sample Progress bar from a Shopify App

Free shipping is one of the biggest drivers of online purchasing decisions, and unexpected shipping costs remain a leading reason shoppers abandon their carts. However, offering free shipping on every single order can ruin your margins, particularly when you are dealing with lower-priced goods.

The workaround is a minimum spend threshold. Something like “Free shipping on orders over $75.” The effect of this is that it will place customers who are near that number in a position where they will stuff an additional item in their cart instead of incurring shipping costs. A person who has $58 in their cart is less likely to pay $8 to ship the products when they can get a $20 add-on and get it free.

Where you set the threshold matters. It should sit slightly above your current AOV. When your average order is $55, you can have a threshold of $75 without overstretching the customers financially. If you set it too high, to $120, for example, most customers would not bother trying.

The real secret sauce? Progress bars and cart notifications. A message that reads, “You’re only $12 away from free shipping!” can serve as an active nudge for the buyer. It gives the customer a specific and achievable target and most e-commerce platforms offer built-in apps or tools to show this in real-time.

Use Smart Upsells During the Buying Journey

Upselling means encouraging a customer to choose a higher-value version of what they were already interested in. It is not about pushing expensive items. It is about presenting a better choice at the right time.

A person buying a simple coffee maker may consider the premium model that comes with a grinder and thermal carafe at an extra cost of $30. A customer who is purchasing a 250 ml bottle of shampoo could be shown the 500 ml, which has a better per-unit value. A buyer who has put a fitness tracker in his/her cart could receive a bundle with a premium strap and charging dock.

The positioning of upsells is very important. They can be used on product pages when the customer is already searching for the options. They also perform at checkout, when the buying intent is high. Post-purchase upsells through thank-you pages or follow-up emails can target customers while they are still in spending mode.

What is the margin between a converting upsell and an annoying one? Clear value. "Here's what you get for the extra $30" works. " Here's something more expensive” —that doesn't. Upsell will not seem pushy when the customer understands that it is worth the upgrade.

Use Tiered Discounts to Encourage Larger Orders

Tiered discounts motivate customers to buy more items by rewarding higher spending levels.

Spend $50, get 10% off. Spend $75, get 15% off. Spend $100 and get 20% off

It is interesting what occurs psychologically. A customer at the $55 level will notice that 15% tier at $75 and begin searching for something to add to their cart to get to the next tier. In their head, the discount “pays for” the additional item. They believe they are saving money and you get a higer order value. Everybody walks away satisfied with the deal.

These are more effective when they are combined with bundles or seasonal offers. A spring sale with tiered pricing layered on top of curated bundles can push AOV significantly during campaign periods.

One thing to note: Be careful not to let discounts destroy your margins. Discounts can easily eat your margins. A product that has a 30% margin with a 20% discount leaves almost nothing. Always calculate the figures and ensure that each level remains profitable. The objective is not small profits but bigger orders.

Common Mistakes That Prevent E-commerce Stores From Increasing AOV

Several common mistakes can sabotage your AOV efforts.

One of them is irrelevant upselling. Recommending a kitchen blender to someone who is purchasing a yoga mat is not a strategy. That's noise. Upsells only convert when they make sense.

High free shipping thresholds are also counterproductive. When you have an AOV of $40, and the threshold is $120, no one is going to go that far. 

Over-discounting is the silent killer. The bumps of short-term AOV feel good until you discover that your profit margins have been gutted. Worse still, the customers become trained to wait for sales, which makes it even more difficult to sell at full price in the future.

And probably the most common mistake? Not tracking AOV at all. You will be surprised at how many stores have campaigns, without even verifying that their average order value is actually moving. You cannot measure progress without a baseline, and you cannot know which strategies are working.

Every AOV strategy should align with your pricing, your margins, and the real-life customer behavior. Test things. Look at the data. Adjust. Stores that treat AOV as a method that should always be optimized, as opposed to a strategy that is set once and left alone, are the ones that experience sustainable revenue growth.