Increasing Average Order Value on Amazon

Increasing Average Order Value on Amazon

As an Amazon seller or brand, one of the most crucial metrics to your overall revenue and success is Average Order Value (AOV). While it is important to compare overall sales numbers at the end of each month as a whole to measure performance, digging into the different KPI’s such as Average Order Value will allow you to make tangible, strategic adjustments to better your sales. 

Average Order Value is defined as the amount your customer spends per purchase, and is one you should develop ways to increase. Though we are always looking for new customers to drive sales, it is much more efficient for your business to get the customers you have already captured to spend more on their purchases.  

To calculate your AOV, all you have to do is select a date range you want to analyze, and take your TOTAL SALES divided by NUMBER OF ORDERS.

Here, we are going to list out several things you can do to optimize your Amazon product listings to increase AOV.

Product Bundles

There are many ways to increase average order value when selling on Amazon. One way is to bundle different products you offer together, and making it cheaper than if the customer was to buy every single product individually.

Take this skincare company, Tiege Hanley as an example. In this product listing, they are offering a variety of men’s skincare products into one and calling it a “system,” making it an appealing offer to men looking for convenience and cost efficiency. For the customer, instead of having to look for face washes, scrubs, and moisturizers individually, they can get all they need from one place.

Cross-Selling/ Upselling

On Amazon, there are different ways you can showcase a variety of products within your catalog. Exposing customers to other options not only helps you build brand value and trust, it also increases the likelihood of them spending more and trying out different products within a single purchase. 

One of the best ways we recommend is to utilize the comparison chart module within A+ content. This supplement brand, Dymatize, offers a variety of supplements that have different functions. By using a comparison chart to showcase their different offerings, product features, functional use cases, and even “best times to use,” they are creating awareness of their different products, and more importantly increasing the chance of a customer buying more than one and increasing AOV.

Another way would be with your Amazon Brand Store, which is essentially Amazon’s version of your website. Here you are able to organize your entire catalog into different categories. This is a great tool to showcase multiple different products for cross-selling, but also upselling. Upselling is a strategy where you promote a better model of a product. For instance, if someone is looking at buying a basic model phone, you could suggest they upgrade to a more premium model. By having your full catalog in one place, customers can easily navigate through all your products to find the ones best for them.

Free Shipping

Offering free shipping to customers is a long standing marketing tactic that has been known to draw success. It is one of the main things a customer looks for when making an online purchase regardless of the platform or product. 

A strategy to increase AOV through free shipping is to set a minimum threshold that a customer has to spend in order to unlock this offer. Studies have shown that people are more than willing to explore other products you offer, or buy multiple of the same product in order to meet the free shipping minimum. Be sure to apply this method in a way that makes sense to your own business.

Discount Options

Depending on the type of products your brand is selling, providing a subscription service for repeat orders will also increase average order value along with customer lifetime value. In our day and age, a lot of people have busy lives and giving them the option to get their products delivered on a regular schedule makes shopping more convenient. If you offer products that are intended for repeat purchases, such as canned coffee, you can offer “Subscribe & Save” which not only repeats the order automatically, but is also enticing for the customer since they will receive a discount.

You can also create a discount that gets applied to orders that meet a certain threshold. Similar to free shipping, the goal is to attract your customers into purchasing several items to qualify for the discount. To implement it, create a percentage off promotion that applies to a larger quantity of one or more items.

Increasing AOV is crucial to growing your Amazon business. Be sure to stay tuned for more articles on how to grow your Amazon to the next level!