In this article you'll find everything you need to know about how to increase average order value. It's written and kept up to date by Mattia Chiaruttini, ecommerce marketing consultant since 2016. Read it to the end, and if you have questions, send me a message.
When the cost of getting a customer goes up, the basket has to go up too. December is the easiest month to do it: people are already shopping for someone else. This guide shows how to increase average order value before the holidays without discounting your margin away, and it includes the maths most guides skip: the break-even of a free-shipping threshold and the margin of each build-your-own kit tier.
If you want a second pair of eyes on your numbers, that's part of my work as an ecommerce consultant.
In short
- Raise AOV with products, not discounts. Bundles and kits spread shipping and fees over more items.
- Shipping is the biggest checkout friction: extra costs account for 40% of abandoned carts in Baymard's research.
- A build-your-own kit lets you price tiers; margin stays around 45% from the second item in our example.
- A lower free-shipping threshold only pays if enough orders stretch to reach it: in our example, 129 of them.
- Check margin per bundle, not just revenue.
What is average order value and why does it matter in Q4?
Average order value, or AOV, is revenue divided by orders. In the holidays, ad costs rise, so each order has to carry more margin to pay for the customer. You can see where AOV sits among the other numbers in the ecommerce KPIs glossary. And shoppers are early: in the NRF 2025 holiday survey, 42% planned to start before November.
Why is shipping the first thing to fix?
Baymard Institute collects research from 50 studies on cart abandonment. The average rate is 70.22%. Among the reasons shoppers give, 42% were just browsing. Of the reasons that sit with the store, extra costs such as shipping, tax and fees come first at 40%, slow delivery is second at 20%, and not seeing the total cost up front accounts for 12%.
That has two consequences for AOV. Raising it with a threshold or a kit can help, but only if the total is clear early. And a delivery promise matters as much as the price.
Seven ways to raise AOV before the holidays, ranked
| Tactic | Effort | Risk | Best when |
|---|---|---|---|
| 1. Bundles of two or three products | Medium | Low | You have products that go together |
| 2. Build-your-own kit with tiers | High | Medium | Customers want to personalize a gift |
| 3. Free-shipping threshold slightly above AOV | Low | Medium | Many orders sit just below the line |
| 4. Gift with purchase over a threshold | Low | Medium | The gift is cheap to you and wanted by the customer |
| 5. Cart add-ons and cross-sell | Low | Low | A small, relevant product fits an existing order |
| 6. Post-purchase one-click upsell | Medium | Low | The customer has just paid and trust is high |
| 7. Gift cards at checkout | Medium | Low | Late December, when shipping is no longer guaranteed |
How do bundles protect margin?
A bundle spreads fixed costs over more products. Example with round numbers, before tax: a single product sells for $24, costs $8 to make, $6 to ship and $0.72 in payment fees (3%). A three-product bundle sells for $60, costs $24, ships for $8 and costs $1.80 in fees.
| Single product | Three-product bundle | |
|---|---|---|
| Price | $24.00 | $60.00 |
| Product cost | $8.00 | $24.00 |
| Shipping | $6.00 | $8.00 |
| Payment fees | $0.72 | $1.80 |
| Margin before ads | $9.28 (39%) | $26.20 (44%) |
| Break-even ROAS | 2.59 | 2.29 |
The bundle has a higher margin and a lower break-even ROAS, so you can pay more for the customer. Run your own numbers in the break-even ROAS calculator.
How do you price a build-your-own kit?
A kit where the customer picks products lets you set tiers: the more they add, the better the price. Example: products at $18 each, costing $6, with tiered prices and a shipping cost that grows slowly with weight.
| Items in the kit | Price | Discount vs single | Shipping | Margin before ads | Break-even ROAS |
|---|---|---|---|---|---|
| 1 | $18 | 0% | $4.50 | $6.96 (39%) | 2.59 |
| 2 | $34 | -6% | $5.50 | $15.48 (46%) | 2.20 |
| 3 | $48 | -11% | $6.50 | $22.06 (46%) | 2.18 |
| 4 | $60 | -17% | $7.50 | $26.70 (44%) | 2.25 |
The margin percentage holds at around 45% from the second item on, while the margin in dollars is almost four times higher with four items than with one. That's why a kit works: the discount is real for the customer, but the cost of shipping and fees is spread across more products.
- Keep the rules simple: how many items, which ones, how long it takes to pack.
- Show the savings: price per item falls as the kit grows.
- Check stock for each item, because one sold-out product can break a kit.
- Pack time is a cost: include it, especially in December.
Ready-made bundles or a build-your-own kit?
With BEEQ we created several holiday bundles and a build-your-own kit, and the two do different jobs:
- Ready-made bundles suit people who want to decide fast. Name them by who the gift is for.
- Build-your-own kit suits people who want to personalize. It tends to lift the order value, but it needs clear rules on what fits and how long it takes to pack.
Whichever you choose, check margin for each version. For the holiday plan around it, read the Black Friday strategy for ecommerce.
Gift boxes and gift-with-purchase
A gift box turns a product into a present, which is why people will pay more for it. A gift with purchase over a threshold works when the gift is cheap to you and wanted by the customer. Avoid giving away something that cannibalizes a product you want to sell. A simple test: the gift's cost should stay below the extra margin the added items bring.
AOV is not the goal: watch revenue per visitor
A change that raises AOV can still lose you money if conversion falls more. The number that tells you is revenue per visitor: conversion rate × AOV.
| Before | After | |
|---|---|---|
| Conversion rate | 2.0% | 1.7% |
| AOV | $55 | $62 |
| Revenue per visitor | $1.10 | $1.05 (lower) |
AOV went up by about 13%, but conversion fell by 15%, so each visitor is worth less than before. The break-even is simple: with an AOV of $62, conversion must stay above 1.77% to keep the same revenue per visitor, which means it can fall by at most about 11%.
As a rule of thumb: when AOV rises by x%, conversion can fall by at most 1 − 1 ÷ (1 + x) before revenue per visitor gets worse. Check it before you celebrate a higher AOV.
How to test an AOV change without fooling yourself
- Change one thing at a time: a threshold, a bundle or an add-on, not all three.
- Run it for at least two full weeks so weekdays and weekends are both covered.
- Track four numbers: AOV, conversion rate, revenue per visitor and margin per order.
- Avoid the event weekend: test before Black Friday, not during it, when everything moves.
- Keep the comparison fair: same traffic sources, similar ad spend, no new promotions mid-test.
Free-shipping thresholds: when do they pay off?
A threshold sounds free but it isn't: you give up the shipping fee on every order that already qualified. Here is a worked example with round numbers. Your free-shipping threshold is $75, with $5.95 charged below it. You consider lowering it to $65.
- Orders between $65 and $74.99: 120 a month. They paid shipping before. They now get it free, so you give up 120 × $5.95 = $714.
- Orders that stretch: shoppers just under $65 who add a $12 item with a 46% margin earn you $5.52 each.
- Break-even: you need $714 ÷ $5.52 = 129 stretching orders a month to recover the lost shipping, before counting any gain in conversion.
If you only get 80 orders to stretch, lowering the threshold loses about $272 a month in this example. If conversion improves because shipping looks cheaper, the picture changes, which is why you test it for a few weeks rather than assume. A threshold slightly above your current AOV works best when many orders sit just under it.
Cart add-ons and post-purchase upsells
Two low-risk tactics often get skipped. A cart add-on is a small, relevant product shown next to the cart, such as a travel size or a gift wrap. A post-purchase upsell is an offer shown right after payment, when the customer has already bought and you can add to the order without a second checkout.
- Keep it relevant: the add-on should make sense with what is in the cart.
- Keep it small: a low-priced item feels like an easy yes.
- Do not hide the total: unexpected costs are a top reason for abandonment, so show everything before payment.
A checklist before December
- Margin per bundle calculated, shipping included.
- Names and descriptions written for who the gift is for.
- Stock and packaging confirmed, especially for build-your-own kits.
- A free-shipping threshold tested against the break-even above.
- Shipping total shown early, before checkout.
- Ads and product pages showing the bundle, not the single product.
Average order value: frequently asked questions
How do you calculate average order value?
Divide revenue by the number of orders in the same period. $44,000 from 800 orders is an AOV of $55. Use revenue before sales tax and net of returns.
What is a good AOV for ecommerce?
There's no universal figure. A good AOV is one that leaves enough margin per order to pay for acquiring the customer. Compare it to your break-even CPA.
Do bundles really increase profit?
They can, because shipping and payment costs are spread over more products. But a bundle that discounts too much can lower margin, so run the numbers per bundle.
Where should I set a free-shipping threshold?
A little above your current AOV, so people stretch a bit without feeling forced, but run the numbers: the shipping you give away on orders that already qualify can outweigh what stretching earns you.
Why do shipping costs matter so much at checkout?
Because extra costs are the biggest checkout-related reason shoppers leave. Baymard's research, based on 50 studies, puts the average cart abandonment rate at 70.22% and lists extra costs such as shipping, tax and fees at 40% of abandonments.
How do I know if a higher AOV is actually good?
Compare revenue per visitor before and after. If conversion falls by more than the AOV gain allows, you earn less per visitor even with a higher AOV.
Is a free-shipping threshold better than a flat low shipping fee?
It depends on your orders. A threshold works when many orders sit just under it. A flat fee is simpler and avoids penalizing customers who do not reach the line. Test both with the break-even maths above.
How long should I test an AOV change?
At least two full weeks, changing one thing at a time, and avoiding event weekends.
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