Enter the revenue from your orders and the number of orders over the same period. You get your average order value (AOV), rounded to the penny, with the workings. In the optional section you can take off refunds, add the number of items sold to see items per order and the average item value, or set a target AOV to see the increase needed per order and the extra revenue it would bring.
Take one period and one source
Use the revenue and the number of orders for the same period, from the same report: your shop's back office, your till system or your accounts. A month or a quarter smooths out the effect of one unusually large order.
With or without VAT?
The calculator works on whatever you enter: VAT-inclusive revenue gives a VAT-inclusive AOV. To compare it with your accounts, use figures excluding VAT, since a company's turnover is stated after trade discounts and VAT are taken off (Companies Act 2006, section 474). Decide too whether delivery charges count, and keep to the same rule from one period to the next.
Refunds and returns
Customers who buy online, by phone or by post can cancel within 14 days of receiving their goods, and you must refund them within 14 days of getting the item back, including standard delivery. Take those refunds off to see the AOV you actually keep. The number of orders stays as you entered it: leave orders cancelled before payment out of both figures.
Items per order and average item value
With the number of items sold, you see how many items a typical order holds and what each item brings in on average. The AOV is items per order × average item value, so there are two ways to raise it: more items in each order, through bundles and add-ons, or dearer items.
Rounding
Amounts are rounded to the nearest penny, with halves rounded up. Items per order and the percentage increase are rounded to two decimal places. The increase per order and its percentage come from the AOV as displayed; the extra revenue is worked out exactly, as target × orders − net revenue.
AOV = revenue ÷ number of orders.
With refunds: net revenue = revenue − refunds, then AOV = net revenue ÷ number of orders.
Items per order = items sold ÷ number of orders.
Average item value = net revenue ÷ items sold.
Increase needed per order = target AOV − AOV; extra revenue = target AOV × number of orders − net revenue.
Example: £18,000 of orders, £900 refunded
In one quarter an online shop takes £18,000 from 400 orders and refunds £900 on returns. Its net revenue is £17,100.00, so its AOV is £17,100.00 ÷ 400 = £42.75, against £45.00 before refunds. The orders held 1,000 items: 2.5 items per order, at an average of £17.10 each. To reach an AOV of £47.50, each order needs £4.75 more, an increase of 11.11%, which would bring in £1,900.00 of extra revenue from the same 400 orders.
