A customer comes to your online store looking for a particular product. A few minutes later, they leave happily with their purchase, with three items in their cart. It was not because of anybsales tactics or endless popups. They simply discovered products that added value to their existing purchases.
And this is precisely what every online business wants to do.
Many shop owners think the only way to make more money is by having more people coming in. New customers are great, but they can be expensive and take a long time to acquire. An easier way is to add a little extra value to every order, which makes it easier for your customers to find the products that are right for them.
Improve your Average Order Value , One of the easiest ways to build your e-commerce business without increasing your marketing budget is to improve your average order value.
Think about how you can get the most value from each sale, rather than just trying to make more sales. Done right, your clients get a better shopping experience and your firm makes more on each order.
In this post, you will learn what Average Order Value is, why it is important, and proven tactics that successful online companies use to build it organically.
You will learn about :
- Cross-selling
- Up-selling
- Bundling
- Free shipping thresholds
- Volume discounts
and real world scenarios that you can implement in your own online store.
Table of Contents :
- What is the average order size?
- Proven Ways to Increase Your Average Order Value
- Ways to Increase Your Average Order Value
- Suggest Related Products
- Bundle things and save a few bucks
- Provide Free Shipping on Purchases Over a Specific Amount
- Additional choices to premium version buyers
- Offer Special Perks For Larger Purchases
- The Impact of Mistakes on Average Order Value
What is the average size of an order?
Average Order Value (AOV) is the average amount of money spent by a customer when they make a purchase from your online store.
The equation is easy. All you do is take the entire revenue and divide it by the total number of orders you got in a given period.
Say you get 200 orders of 100,000 then you average order value is 500.
That number might just look like another business metric, but it is an important measure of the health of your e-commerce business.
A higher average order value means you’re extracting more from the customers you already have, without spending any more money to acquire new customers.
If you can convince every customer to spend a little more, this can really add up to more revenue for your business every month.
Growing your business isn't always about more customers. Sometimes it's helping your current customers get more value out of every purchase.
Why is it important
Businesses spend a lot of money advertising to get new people to their website. If those visitors simply buy one cheap product then your profit margins can be tiny.
Increasing your Average Order Value means you make greater use of the traffic you already get. Even a slight increase in the amount spent by each customer can have a substantial influence on your monthly earnings.
Average Order Value Increase Tactics
There’s no magic trick for increasing average order value overnight. Successful e-commerce businesses use a clever combination of strategies that do the dual job of improving the shopping experience but also help drive customers to purchase products that will actually be of benefit to them.
The five most common tactics are cross selling, upselling, bundling, free shipping thresholds, and volume discounts. Once you get these ideas, you’ll know when to use the right approach.
1. Cross Selling
Cross selling is suggesting products that make sense with something a customer is going to buy anyway.
It’s more about helping customers to buy related products that are helpful for them.
Customers appreciate the related recommendations because they save time when looking for products that match well.
Real life example :
Customer receives a DSLR camera,
The website doesn’t suggest irrelevant products but a memory card, camera bag, and cleaning kit.
These products also improve the overall experience of the customer, as they are useful accessories for the customer.
Cross selling should be based on products that really add value to the original purchase.
2. Upselling
Upselling is when you convince a customer to buy a higher quality or more fully featured version of the product they are already interested in.
You don’t ask your customers to buy different things, but instead show the additional value they will receive if they opt for a premium version.
Most clients are prepared to pay a bit more if they can see the value they are getting. It’s never a price issue. It’s always a value issue.
Practical Example:
A customer wishes to purchase a simple office chair,
You may also buy a premium edition of the website that offers a five-year warranty, higher padding, superior build quality and adjustable lumbar support.
The customer checks out the features and decides the upgraded chair is worth the extra money.
Upselling that works improves the customer’s decision, not its cost.
3. Bundling
Bundling is the practice of taking a collection of similar products and offering them as a bundle for a greater price than if the client bought them separately.
Most clients want to get a full solution, it saves time and money.
It's easy to buy bundles. Everything they need is in one package so they don’t need to compare products one by one.
A practical example :
The fitness store has a Fitness Starter Kit, which is a yoga mat, resistance bands and a water bottle.
You will end up paying ₹2,400 per product if you buy the products separately.
The entire pack is available at ₹2,099.
This means that customers save money and get everything they need to start their fitness journey.Don’t just throw random products together, create bundles that solve a complete problem
4. Free Shipping Thresholds
A free shipping threshold is the minimum amount a customer needs to spend to be eligible for free shipping.
This tactic is used to get shoppers to add another useful item of paying for shipping.
For most consumers, free shipping is a perk, not a sales tactic. It looks like they’re getting more for their money without paying more.
Example :
A customer has added items worth Rs 1850 to the cart.
Get free shipping on orders above ₹2,000.
The customer pays ₹100 for delivery and orders a ₹250 notebook to get free delivery.
The customer gets a different product, and the business gets a bigger order.
Set a free shipping cutoff that you think is reasonable and will really offer value for your clients.
5. Volume Discounts
Volume discounts stimulate purchasers to purchase more of one product at a lower price.
This is especially handy for items you buy regularly or have to restock from time to time.
People want to buy bulk and save money. Companies seek to increase the value of each order. “Businesses want their inventory to move more quickly.'
Example : Online Stationery Shop Note Book Rs. 200/- Each
And this is the price:
Buy 1 notebook for Rs.200.
Buy 3 notebooks at Rs. 540 only.
Buy 5 notebooks @ Rs. 850/- only.
Students and office workers who know they will need more notebooks tend to buy the larger quantity because it is cheaper.
Volume discounts work best when people want to buy multiples of the same thing, not when they are tempted to buy more than they need.
Why Increasing the Average Order Value Matters
Every online store owner would like to grow sales but it’s challenging to attract new clients.
Running ads, boosting your search rankings, and building up a social media presence all cost time and money. These efforts are important, but many businesses overlook another way to grow their revenue.
It’s not only about bringing more visitors, you can also increase the value of each order. A little more money spent, on average, by each of your customers can go a long way toward increasing your monthly revenue.
Why this is important
Your average order value goes up and you make more money from your existing customers who trust your business.This maximises your return on marketing investment, as you can generate additional revenue without any extra spending to gain new customers.
This approach also represents a more effective business model. You increase the value of each customer who comes into your store. Not just constantly increase traffic.
Real life example :
Consider two internet stores selling similar home design items.
Each store has 1,000 visitors a month. Each store turns 100 of those visitors into clients.
Store A: Average order value = Rs. 900.
Store B: Average Order Value = ₹1400
Both stores have equal quantity of orders. But store B makes ₹50,000 more revenue just because clients spend more on each purchase.
Benefits :
- More Revenue Without More Website Traffic
- Better ROI on ad spend
- Higher profit margins
- Sustainable expansion of the business
Sometimes, growing your business doesn't mean getting more customers. Occasionally it’s way more effective to get an existing customer to buy a little more.
Recommend Products That Actually Make Sense
Customers appreciate recommendations when they are helpful. They get frustrated if they are shown products that are not relevant to their purchase.
The goal is to recommend products that go well together and improve the customer experience.
Why This Matters
The relevant ideas save consumers' time. Rather than go and find more themselves, all the product consumers require is in one area.
It creates value for every order and improves the shopping experience.
Example :
A customer buys a travel backpack for an upcoming vacation.
The online store also recommends a luggage organizer, a travel neck pillow, and a reusable water bottle.
These suggestions are practical as they address the customer’s travel plans rather than distract the customer with unrelated products.
Benefits :
- Better shopping experience
- Improved customer satisfaction
- Upsell
- Improved product discovery
Each recommendation should answer the simple question:
Is this product really adding value to the customer’s purchase?
If so, it should be a successful performer.
Make Money Saving Product Bundles for Your Buyers
Many customers would prefer to buy a complete solution rather than select each item separately. That’s where product bundles come in handy.
A package deal of numerous connected products, usually offered at a higher value than the individual products would be if bought separately is called a bundle.
Importance :
The bundles help in decision making.
With one click, customers can purchase all of their needs rather than comparing several products individually. This convenience often leads to bigger purchases and also makes shopping easier.
A coffee brand has a home brewing starter kit that includes
- A coffee maker
- Coffee beans of high quality
- Reusable coffee filter
- Ceramic coffee mug
The individual cost of each item is ₹5,200.
The whole bundle comes for Rs. 4,699.
When customers buy everything they need for fresh coffee at home, they feel like they’re getting a deal.
Benefits :
- Higher Average Order Value
- Simple shopping with a high perceived value.
- Higher sales of ancillary products
The best bundles address a specific problem completely. The customer should have the feeling that he is buying a ready-made solution and not a collection of random products.
Provide Free Shipping Over a Threshold
One of the most common reasons shoppers abandon their cart is shipping charges. Even a small charge for delivery can cause many shoppers to hesitate at the final step of checkout.
A free shipping threshold motivates customers to buy another useful product instead of paying for shipping.
Rewards are a customer favorite.
By the time shoppers hit the free shipping threshold on a certain order value, they often discover that they really need another product.
They feel they are getting a better bargain with less pressure. a better bargain, not being pressured.
For example:
Customer has in basket Skincare Products of value Rs 1850.
Free Shipping on Orders Rs.2000 & above
Consumer looked at a lip balm, planned to buy in future, but costs 250₹.
They put it in their cart, get free shipping, and buy it happily.
The customer gets another useful product, and the company benefits from a higher order value.
Benefit :
- Persuades customers to spend a little bit more
- Decreases cart abandonment
- Improved customer satisfaction
If you set your minimum purchase amount too high, customers might be reluctant to make their purchase.
A realistic threshold usually is much better.
Set your free shipping threshold slightly above your current average order value. It’s designed to give customers one or two useful products to add without making the goal feel impossible.
Customers get more options with premium versions
Price doesn’t matter to some customers. There are plenty of people who will gladly pay more if they know exactly what they are getting for it.
And this is where the art of upselling comes into play. You don’t sell them something else. You sell them a better version of what they want.
Importance :
Upselling is the art of giving the customer the choice to select the best option for them. But, for many purchasers, these increased features translate to a good investment rather than an unnecessary cost for the pricier option.
The trick is to think in value, not cost.
Example :
Shopper purchases wireless earbuds.
It has two options. Online.
Rs 2,499 Normal model
Premium model has active noise cancelling, longer battery life and water resistance. Plus 2 year warranty. The premium model costs ₹3,499.
The buyer compares the features, sees that the premium version is more valuable in the long run and buys it.
Benefits :
- Increases Average Order Value
- Helps customers find products that fit their needs better
- Improves consumer satisfaction
- Gives more ways to make money.
Upselling is not about selling more expensive things, it is about adding more value.
Offer Volume Discounts for Large Orders
Some products are used regularly and need to be replaced from time to time. In these cases the customer will normally want to buy more at a better price.
This is where volume discounts can be helpful.
There was no leaving anything out. Buy bulk and get reward.
Why this matters
Volume discounts are good for the customer and good for the business.
A business gets the advantage of a higher average order value, meaning that clients are buying more in one transaction. This assists in saving expenditures and the requirement to re-order the same things time and again.
This works particularly effectively for items like everyday items, office supplies, groceries, beauty products and pet supplies.
Real life example :
Buying Organic Green Tea Online.
Prices are:
Single pack: Rs 350.
Get 3 Pack only for Rs.945.
5 Packs Rs.1500 [Buy Now]
Some drink green tea daily and know that they will drink it eventually and sometimes take larger amounts.
Benefit :
- Increased Average Order Value
- More value to customers.
The company has to be careful with its discounting to make sure it still makes a profit.
The conclusion is this:
The best volume discounts are on things customers will buy over and over. It should feel like a treat, not a trick. Offer special benefits for larger purchases
Interestingly, the reward doesn’t necessarily have to be a discount. Sometimes the little perks are more memorable and make customers feel valued.
Customers feel that they are getting more value for a certain price.
Errors That Lower Average Order Value
Many companies are so focused on driving sales that they create a shopping experience that is overwhelming. Those mistakes often work the other way around and get customers to buy more.
Below are some of the most common mistakes to avoid :
- Recommending irrelevant products
- Excessive Choice
- Setting the free shipping threshold too low
- Ignored Mobile Shoppers
- Complex process of checkout
- Central theme
The idea is to make shopping easier, not more difficult. More often than not, removing extraneous friction has a bigger impact on Average Order Value than adding new sales strategies.
Conclusion :
Increasing your Average Order Value is not about getting customers to spend money they don’t want to spend. It's about helping them find products that actually improve their purchase and give them more value.
Remember customers are more likely to buy more when they feel supported, not pressured.
Relevant product recommendations, meaningful bundles, realistic free shipping targets and attractive volume discounts all help customers to make better buying decisions.
Finally, a well designed online store is essential to maximise the benefits of any of these tactics.
A fast, well organised and easy to navigate website encourages customers to browse more products and complete their purchases with confidence.
If you want to start or grow your ecommerce business platforms like JoonWeb give you everything you need to build a professional online store with no technical knowledge so you can focus on giving your customers the best shopping experience.
Instead of asking, “How do I get customers to spend more?"
Ask yourself: “How can I ensure customers are getting more value from each purchase?”
This one simple shift in thinking means happier customers, stronger relationships and long term business growth.
