How AOV is calculated (gross vs. net)

At its simplest, Average Order Value is just revenue divided by orders. But “revenue” can mean different things depending on what you want to optimize. Some teams track gross AOV (before discounts and refunds) because it helps with merchandising decisions. Others track net AOV (after discounts and refunds) because it better reflects what the business keeps.

• Gross AOV = Gross Revenue ÷ Orders
• Net Revenue ≈ Gross Revenue × (1 − Discount Rate) × (1 − Refund Rate)
• Net AOV = Net Revenue ÷ Orders

This calculator shows both: gross AOV (the “topline” view) and net AOV (a more conservative “kept revenue” view). If you run frequent promos, discount leakage can be a bigger drag than you expect — and returns can quietly erase revenue if your product category has high refund rates.

• Projected Net AOV = Net AOV × (1 + Uplift %)
• Projected Net Revenue = Projected Net AOV × Orders
• Revenue Lift = Projected Net Revenue − Current Net Revenue

Notice what’s interesting here: if order volume stays constant, the uplift acts like a multiplier. A 15% AOV increase means roughly 15% more revenue on the same order count (after we account for discounts/refunds in the baseline). That’s why AOV improvements can be so powerful.

What the numbers mean in real life

AOV is not a “good” or “bad” number on its own — it’s a reflection of your price points, customer intent, and how you structure offers. The goal is not to inflate AOV at all costs; the goal is to raise AOV while keeping conversion, satisfaction, and margin healthy.

• Low AOV + high conversion often means you need bundles/add-ons more than price changes.
• High AOV + high refunds can mean expectation mismatch (fix product page, sizing, photos, QA).
• Heavy discounts can “fake” AOV growth while hurting profit. Track net AOV alongside margin.
• Threshold tactics (free shipping over $X) are usually “win-win” when set near your current AOV.

Use the uplift slider for planning. If your team is testing a bundle, add-on flow, or cart UX change, set uplift to the expected range (say 5–20%). The revenue lift estimate helps you decide if the change is worth engineering, design, and marketing effort.

Worked examples (so you can sanity-check)

Numbers feel more trustworthy when you can do a quick mental check. Here are a few realistic scenarios. You can recreate them with the sliders above to see the same outputs.

Suppose your store made $50,000 from 1,000 orders in a month. Gross AOV is $50,000 ÷ 1,000 = $50. If you want to grow revenue without increasing traffic, an AOV lift means each order becomes more valuable.

Now assume your average discount rate is 10% and refund rate is 5%. Net revenue ≈ $50,000 × 0.90 × 0.95 = $42,750. Net AOV = $42,750 ÷ 1,000 = $42.75. That gap ($50 vs $42.75) is revenue leakage. Seeing it clearly often changes what you prioritize: you might focus on reducing returns or discount reliance rather than only pushing upsells.

Using the net AOV above ($42.75), a 15% uplift yields projected net AOV ≈ $42.75 × 1.15 = $49.16. With the same 1,000 orders, projected net revenue becomes about $49,160. Revenue lift ≈ $49,160 − $42,750 = $6,410 per month. That’s the rough upside of a successful AOV test.

Let’s say your goal is a net AOV of $60 but you’re currently at $42.75. You’d need an uplift of roughly (60 ÷ 42.75 − 1) ≈ 40%. That’s a big jump — it likely requires changing the offer structure (bundles, higher-priced products, subscription packs), not just a “you may also like” widget.

High-leverage AOV plays (ranked by “customer-friendly”)

The best AOV strategies feel like better shopping, not pressure. Here are proven plays with practical notes so you can choose tactics that match your brand.

• Set the threshold ~10–20% above your current AOV (e.g., AOV $50 → threshold $60).
• Add a cart progress bar (“$12 away from free shipping”).
• Offer small add-ons to help customers “top up” easily.

• Make bundles easy to understand (what’s included + savings clearly shown).
• Use “good / better / best” tiers to guide choice without forcing it.
• Bundling works best when items naturally go together (routine, set, refill).

• Keep it relevant: protectors with phones, filters with vacuums, sauce with meals.
• Use low-friction language (“Add for $9”) not guilt (“Don’t miss out!”).
• Pick add-ons with strong margin and low return rate.

• Volume discounts can raise AOV but may reduce margin if overused.
• Try “Buy 2 save 10%, buy 3 save 15%” and measure profit, not just revenue.

What this calculator is doing (step-by-step)

You can think of this tool as two calculators glued together: an AOV calculator (gross and net) and a planning model for “what if we raise AOV by X%?” The logic is intentionally transparent so you can trust it and recreate it in a spreadsheet.

• Choose a timeframe (daily / weekly / monthly / quarterly / yearly).
• Enter gross revenue and total orders for that same timeframe.
• Compute gross AOV = revenue ÷ orders.

• Discount rate reduces what you keep: net revenue ≈ gross × (1 − discount).
• Refund/return rate reduces kept revenue further: net ≈ net × (1 − refund).
• Compute net AOV = net revenue ÷ orders.

• Uplift slider increases net AOV by a % (think: bundles, add-ons, thresholds).
• Projected revenue = projected net AOV × orders.
• Revenue lift = projected − current.

The relative meter is just a visual to show when your uplift is small vs big. It doesn’t label your business; it simply maps your revenue lift to a 0–100 scale so changes feel tangible.

Frequently Asked Questions

• What’s the “right” AOV for my store?

  There isn’t a universal “good” AOV. AOV depends on your product category, price points, and customer intent. The best benchmark is your own trend over time and peers in your niche.

• Should I track gross AOV or net AOV?

  Track both if you can. Gross AOV is useful for merchandising and price architecture. Net AOV helps you see how discounts and refunds affect what you actually keep. If you run lots of promos, net AOV is often the better decision metric.

• Does raising AOV always increase profit?

  Not always. If AOV rises because of heavier discounting, profit can drop even while revenue rises. Also, if upsells increase returns or support costs, profit may not follow. Use unit economics and margin tracking alongside AOV.

• How do I choose a realistic uplift %?

  Start conservative. Many stores see 5–10% from simple cart UX improvements, and 10–25% from strong bundles/thresholds if implemented well. Use your own A/B test history when possible.

• Why do you apply discounts and refunds multiplicatively?

  It’s a practical approximation: discounts reduce revenue, then refunds remove a fraction of what remains. In real accounting, discounts and refunds are line items, but this multiplicative model is simple and usually close enough for planning scenarios.

• Can I use this for subscriptions?

  Yes, as long as “orders” matches your definition (new subscriptions, renewals, or checkouts). For subscriptions, some teams use Average Revenue Per User (ARPU) or LTV. AOV is still useful for checkout value and upsell packaging.

• What if I have multiple currencies or sales channels?

  Compute AOV per channel first (Shopify, Amazon, retail, etc.), then combine if you need a blended metric. A blended number is helpful for a snapshot, but channel-specific AOV is more actionable.