How to Increase Average Order Value on Shopify Without Giving Away Your Margin
Written by Abbie Evans, Founder and Principal, Arqet Consulting
Abbie brings more than 25 years of experience across ecommerce, retail leadership, finance, merchandise, operations and building her own online retail business.
Direct Answer
Increasing average order value on Shopify can improve ecommerce profitability when the additional basket value exceeds the cost of discounts, shipping and fulfilment. Effective strategies include profitable product bundles, complementary merchandising and carefully calculated free-shipping thresholds. AOV should be measured alongside margin and contribution per order, rather than treated as a standalone growth metric.
Increasing average order value is one of the most common recommendations given to ecommerce businesses.
The logic seems straightforward: if every customer spends more, revenue increases without necessarily needing more traffic or more customers.
But there is an important qualification.
A higher average order value does not automatically mean a more profitable order.
Discounts, free shipping, product margin, fulfilment costs and promotional incentives can all change the economics.
So the objective shouldn't simply be to increase AOV. It should be to increase the commercial value of each order.
What Is Average Order Value on Shopify?
Average order value, or AOV, is calculated by dividing revenue by the number of orders generated during the same period.
AOV = Revenue ÷ Orders
It is a useful ecommerce metric because it tells you, on average, how much revenue each transaction generates. But like many averages, it doesn't tell the whole story.
Two Shopify stores can have exactly the same AOV while producing very different levels of profit. One may be selling high-margin products with relatively low fulfilment costs.
The other may be using discounts, subsidised shipping and expensive customer acquisition to generate the same basket value.
The revenue number looks identical. The commercial result isn't.
Why AOV matters more when basket sizes are under pressure
Australian ecommerce provides a useful example. Australia Post's 2026 eCommerce Report found that Australians spent $82.6 billion online in 2025, up 14% year on year, while average basket sizes fell to $96.
Customers were buying online more frequently, but spending less each time.
For ecommerce businesses, smaller baskets can create a particular challenge because many order costs don't reduce proportionately with the basket.
An order may still require payment processing, picking, packing, packaging, fulfilment, shipping, customer service and returns processing.
That means increasing AOV can be commercially valuable — provided the method used to increase it doesn't simply give the additional value away somewhere else.
Start with the economics of the order
Before implementing an AOV strategy, understand what a typical order contributes.
Look beyond revenue and consider product margin, discounts, shipping, fulfilment, payment costs and customer acquisition.
The aim is to understand what remains after the costs associated with generating and fulfilling the order. That gives AOV context.
1. Use bundles strategically
Bundles can be an effective way to increase average order value because they allow customers to buy products that naturally belong together.
Good bundles solve a customer problem or simplify a purchase. They might be routine bundles, starter bundles, replenishment bundles or complementary bundles.
The commercial question is: Does the bundle increase basket contribution as well as basket value? A heavily discounted bundle may produce a higher AOV but a weaker margin.
2. Improve complementary merchandising
Increasing AOV doesn't always require a formal promotion. Sometimes the opportunity is simply making the next logical product easier to find.
Product recommendations can be built around genuine customer needs: “Complete the set”, “Frequently purchased with”, “You may also need” or “Works with”.
Random cross-selling creates noise. Good merchandising reduces the work the customer has to do to complete their purchase.
3. Review your free-shipping threshold
Free shipping can be a strong conversion and AOV lever, but the threshold should be based on commercial economics rather than an arbitrary round number.
Review current AOV, common or median basket values, average shipping cost, gross margin, geographic shipping differences and products customers could realistically add to reach the threshold.
The right question isn't “What free-shipping threshold looks competitive?” It is “At what threshold does the additional basket contribution justify the shipping subsidy?”
4. Don't automatically use discounts to increase AOV
A common tactic is: Spend $100 and receive 10% off. It may increase basket size, but consider what happens to margin.
Alternatives can include gift with purchase, selected-product bundles, complementary add-ons, tiered rewards, loyalty benefits, product exclusives and free-shipping thresholds.
The right mechanism depends on the objective and the underlying margin.
5. Look at what customers actually buy together
Your order history can often tell you more than another list of ecommerce best practices.
Analyse products commonly purchased together, categories appearing in the same basket, high-margin complementary products, order values immediately below your shipping threshold, differences between new and returning customers, and AOV by channel or segment.
This turns an AOV strategy from guesswork into merchandising.
6. How to Increase Average Order Value on Shopify Profitably
AOV is only one part of ecommerce performance.
Monitor it alongside conversion rate, gross margin, contribution per order, units per transaction, fulfilment cost, shipping cost, customer acquisition cost, repeat purchase and returns.
The objective is not the highest possible AOV. It is a healthier ecommerce model.
A better question to ask
Instead of asking: How can we make customers spend more? Ask: How can we create a basket that provides more value to the customer and better economics for the business?
That shift changes the conversation. AOV becomes a commercial strategy involving merchandising, pricing, margin, fulfilment and customer behaviour — rather than another metric to push upwards.
Looking beyond the top line
If sales are growing but the commercial result isn't keeping pace, AOV may only be one part of the issue.
Arqet looks across ecommerce performance to identify where revenue, margin, conversion, customer behaviour and operational costs are working together — and where they aren't.
Related Insight: Why Sales Growth Does Not Always Create Ecommerce Profit
Next step: Explore the Arqet Ecommerce Growth Audit or request a strategy call.
