Many Amazon businesses struggle to increase their average order value. Even if you have great conversion rates and high store traffic, there’s still a chance that shoppers may only buy a few select items.
Customers usually turn to Amazon when they need to buy something online. The brand value of Amazon is $705.7 billion. This makes the retail giant a dominant force in e-commerce.That’s why it’s crucial for sellers to understand and keep track of their average order value.
But how can such a metric help you? Is there a way to entice customers to buy more? Here’s your guide to the Amazon average order value and how to increase it.
What Is Average Order Value on Amazon?
Average order value (AOV) is the median dollar amount that customers spend on your Amazon store for every shopping experience. Most businesses look at AOV by periods. For example, you may determine AOV by month or quarter.
Every seller should entice visitors to spend more per shopping experience. When you determine your AOV, you can implement tactics to increase sales per transaction. This way, you can build a consistent revenue stream and achieve higher profit margins.
How to Calculate Average Order Value on Amazon
The best way to determine AOV is by calculating the revenue per time period divided by the number of sales you received. This figure will give you the average amount a customer spends per transaction.
However, there are other ways to determine AOV and create goals from there. More businesses are looking at the average Amazon order value and the most frequently occurring value. To find the latter, you can look at the Amazon Reports and KPI section in Seller Central.
The reason why businesses look at AOV in different ways is to better understand their orders, the times in which customers may purchase more, and when upsells are appropriate.
How to Increase Average Order Value
Did you look at your AOV and want to increase how much customers spend per transaction? Fortunately, there are several tactics that you can use to do this.
Remember that your strategy needs to align with the marketplace’s selling standards, what customers want, and other best practices that come with selling on Amazon.
Quantity discounts are one of the best seller promotions that can improve your AOV. Amazon lets you apply quantity discounts when customers buy a specific number of products at your store. When customers are in your store, they will see the quality discounts on your product listings.
The best part is you don’t have to apply this to a huge order – just enough to make your AOV goal. You can also apply discounts to certain items, which is a wise move when you’re promoting a product.
You can either apply a fixed price or a percentage off. To do this, go to Amazon Seller Central and click Pricing < Manage Pricing < Quantity Discounts.
When a customer adds products to their shopping cart, you can cross-sell by promoting other recommended products. The idea is to recommend complementary products that entice customers to add the second item to their shopping cart.
While Amazon doesn’t offer a specific cross-selling feature, brands can upsell customers in different ways:
- Mention complementary products in your product descriptions and images.
- Use sponsored ads to promote up to three products simultaneously.
- Invest in product targeting, where certain products appear on other listings.
- Offer new promotions (such as a buy-1-get-1 deal) and product variations.
Free Shipping Threshold
While Amazon Prime customers already receive free shipping, you can also offer this discount to non-Prime customers.
To add free shipping discounts, go to Seller Central and go to Shipping < Shipping Settings. You can set free shipping on a per-item or weight basis.
For AOV, it’s best to set shipping per item. The goal is not to set free shipping too low to not meet your goals but to not set them too high to make the threshold unattainable. You can also select which countries and regions qualify for the free shipping discount.
Another great option is to use alternate shipping methods, such as USPS Sunday Delivery (if applicable).
More stores are selling products as a bundle. You can either choose to create specific bundles or offer both individual items and bundled product sets.
Product bundles offer many benefits for businesses. They can entice customers to purchase more products and can also help you save on shipping.
Bundle items are products that work together or are similar. For example, a two-piece activewear outfit, or two skincare products that are commonly used together.
You’ll also need to offer your bundles at a lower price to create a more attractive deal for customers. Help them see that buying more than one item is a better deal than buying a single product. This could also make it difficult for stores to meet their AOV if the customer only buys one bundle.
Alternatively, you can train Amazon’s algorithms to display certain complementary items in the Frequently Bought Together section. You can do this by offering promotions for complementary products, such as buy-1-get-1 deals.
This way, Amazon will know which items are popular among your customer base, and can recommend them to other shoppers.
Use Amazon Moments
Many sellers that aren’t on Amazon use a customer loyalty program to increase AOV. While Amazon doesn’t offer a customer loyalty program for sellers, they offer a similar platform called Amazon Moments. These are tailored rewards to increase customer engagement and may drive more sales to your store.
To create a Moments campaign, sellers can access the Moments API and sign in with their Seller Central account. From here, you pick a certain action you want users to complete and set a reward.
Rewards can be physical, such as a free item, or digital rewards, such as store credit or a discount.
Achieve an Excellent Average Order Value on Amazon
Amazon is a great way to increase sales and drive conversions. But there may be a chance that you’re not achieving a decent average order value.
Have you tried these tactics and still aren’t achieving the average order value you need? You may need professional insight. We offer full-service solutions for Amazon sellers with various tactics to improve your sales.
Stephanie Jensen has been writing e-commerce content for seven years, and her copy has helped numerous stores rank on Amazon. Follow her on LinkedIn for more insight into freelance writing and creating high-quality content.