Formula
Average order value divides revenue by the number of orders:
Average order value = revenue / orders
The result is rounded to the nearest cent.
Assumptions
- Each order is counted once.
- Revenue is the amount those orders produced, after you have already removed any refunds you do not want included.
Worked example
$24,000.00 of revenue across 160 orders is an average order value of $150.00.
Input definitions
- Orders
- The count you divide by. At least one is required.
- Revenue
- The sales those orders produced. Zero is allowed.
Limitations
This is a planning estimate, not accounting, tax, payroll, or advertising advice. The currency control changes the symbol only.
Questions
Does this include shipping the buyer paid?
Only if that money is inside the revenue you typed.
How is this different from lifetime value?
This is one order. Lifetime value multiplies an order by repeats, years, and margin.