What counts as a high AOV depends entirely on your sector

2 days ago
3 min read

Updated: 1 day ago

Introduction

People want a benchmark. Somebody reads that the average online order is £85 and concludes their £42 is a problem, or that their £150 is excellent. Neither conclusion follows, because average order value varies by an order of magnitude between sectors and the published figures are averages of averages.

A high AOV is not a number. It is a relationship — between what an order is worth and what it costs you to win one. A £30 order value is excellent if acquisition costs £4 and terrible if it costs £25.

That relationship is calculable from data you hold, and it is the only benchmark worth having.

1. A high AOV is one that comfortably covers acquisition

The definition worth using.

Order value, minus cost of goods, minus cost of acquiring the order. If what remains is comfortable, the value is high enough. If not, it is not, whatever a published average says. The threshold is yours to set.

2. Published benchmarks are averages of averages

The reason to distrust them.

They combine sectors with nothing in common and are usually drawn from the customer base of whoever published them. Read them for shape, never for level. Check the date as well.

3. Your own trend is the real benchmark

The comparison that works.

Last year's figure came from your customers, your prices and your market. It is the only genuinely like-for-like number available to you. Twelve months of it beats any industry report. Keep the monthly series running.

4. Compare against the upper quartile of your own orders

The internal target.

Your best quarter of orders shows what is achievable with your existing products and customers. Moving the average toward that is a realistic goal. It is also evidence that the higher value is possible. Look at what those orders contained.

5. High value and high margin are different things

The distinction that catches people.

A large order of low-margin items can be worth less than a small order of high-margin ones. Look at contribution, not revenue. This reverses the ranking more often than expected. Calculate it once per product group.

6. Sector shape matters more than sector average

The useful comparison.

Whether your category is one-item or multi-item, considered or impulse, replenished or one-off — those structural facts set the plausible range. A single-item considered purchase will never have a basket-driven average.

7. A very high AOV brings its own problems

The other end.

Large orders mean fewer of them, longer deliberation, more refund exposure and heavier concentration risk. High is not automatically better. There is a comfortable middle for most businesses.

8. Judge it per channel

The necessary segmentation.

A single blended figure hides that one channel is producing double the value of another. The channel-level numbers are the ones you can act on. The blended one is for reporting.

9. Set your own target and write down why

The practical step.

A figure derived from your acquisition cost and margin, with the reasoning recorded, survives staff changes and arguments. Review it annually. An arbitrary target from an article does not survive contact with a bad quarter.

Be careful about optimising toward a high average by discouraging small orders. Those buyers frequently become repeat customers, and a minimum order that removes them can raise the average while lowering the lifetime value of the customer base.

Conclusion

Stop looking for an industry figure and calculate the one that matters.

Define a high AOV as one that comfortably covers goods and acquisition, treat published benchmarks as directional at best, compare against your own last twelve months and against the upper quartile of your own orders, look at contribution rather than revenue, allow for the structural shape of your category, judge it per channel rather than blended, and write down your own target with the reasoning behind it.