Shopify Secrets: Increase Your Average Order Value

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When it comes to running an e-commerce store, most people obsess over improving their conversion rates or retention. But there’s one metric that’s often overlooked, and it might just be your biggest opportunity to grow your revenue: Average Order Value (AOV).

Why is AOV so powerful? Simple: it boosts your revenue without increasing your marketing costs. Every extra dollar in AOV means more profit without spending more on customer acquisition. So, let’s break down exactly how you can optimize this golden metric and unlock hidden revenue in your store.

What Is AOV, and Why Should You Care?

AOV is the average amount a customer spends per order. But it’s more than just your product price—here’s what it includes:

1. Product Price: The starting point of every order.

2. Shipping Revenue: Any fees for shipping, whether it’s standard or express.

3. Upsells and Cross-Sells: Additional products customers add to their cart during or after checkout.

4. Tipping: Optional tips that can significantly boost your profits.

5. Discounts (negative impact): Any coupon codes or promos that lower the final total.

6. Transaction Fees (negative impact): Payment processor charges, like PayPal or Stripe.

Understanding these components gives you the roadmap to optimize AOV effectively.

1. Add Tipping Options to Boost Revenue

Tipping might sound like something that belongs in restaurants, but it’s a massively underutilized feature in e-commerce. Shopify even has a built-in tipping option that many store owners overlook.

How to Enable Tipping

• Go to Shopify’s Checkout Settings and enable tipping.

• Customize your tipping options (e.g., 10%, 15%, and 20% presets).

• Remove any unnecessary hurdles, like hiding the tipping section behind a checkbox.

Why Tipping Works

Even if only 5-10% of your customers tip, it adds up. For example, if your average order is $50 and 10% of customers tip 15%, you’re adding an extra $0.75 per order in pure profit. That’s free money with no additional effort.

2. Master Upselling and Cross-Selling

Upselling and cross-selling are the bread and butter of increasing AOV. They work by encouraging customers to buy either premium versions of products or complementary items.

Best Places for Upsells and Cross-Sells

• Product Pages: Suggest related items or upgrades right where customers are browsing.

• Checkout Pages: Offer last-minute deals, like “Add this for 20% off!”

• Thank You Pages: Post-purchase offers are especially effective because customers are already in a buying mindset.

Pro Tip:

Use apps like One Click Upsell or Bold Upsell to automate and personalize upselling. A well-placed offer, like a discounted bundle or complementary product, can do wonders for AOV.

3. Personalize Post-Purchase Flows

The sales journey doesn’t end at checkout. Post-purchase flows are a goldmine for driving repeat purchases and increasing AOV.

How to Create Effective Flows

• Email: Send tailored recommendations shortly after purchase.

• SMS: Tools like SMSBump have higher open and conversion rates than emails.

• Push Notifications: Apps like PushOwl let you re-engage customers directly through their browser.

Example:

If someone buys a coffee grinder, your follow-up flow could recommend premium coffee beans or a grinder cleaning kit. Personalized offers like these create more value for the customer and boost your AOV.

4. Optimize Shipping for Profits

Shipping fees are often overlooked as a revenue stream. But by offering tiered options, you can encourage higher spending while maintaining customer satisfaction.

Strategies to Try

• Free Shipping Thresholds: Offer free shipping for orders over a specific amount (e.g., $60).

• Premium Shipping Options: Charge for express or expedited shipping (e.g., $12.99).

• Test Thresholds: Use Shopify’s abandoned checkout insights to find the sweet spot for free shipping.

Why It Works

Even if only 10% of customers choose premium shipping, the additional revenue adds up quickly. Plus, it doesn’t deter budget-conscious shoppers who can still opt for free shipping.

5. Experiment with Dynamic Pricing

Dynamic pricing adjusts product prices based on inventory, demand, or time-based rules. It’s an advanced yet incredibly effective way to maximize revenue.

How It Works

• Use apps like Dynamic Pricing by Prisync to automate price changes.

• For example, when inventory drops below 10 units, increase the price by 20%.

Pro Tip:

Dynamic pricing isn’t just for managing scarcity. Use it during peak demand periods, like holidays, to boost margins without sacrificing sales.

6. A/B Test Your Pricing

Pricing is an art and a science. With A/B testing, you can identify the perfect price point that maximizes revenue without hurting conversions.

How to Test Pricing

• Use apps like Dexter to split traffic between two price points (e.g., $69.95 vs. $74.95).

• Measure which price delivers the highest revenue per 100 visitors.

Example:

In one test, raising the price of a product from $69.95 to $74.95 resulted in no drop in conversion rate, adding $5 to AOV per order. That’s a massive gain over hundreds or thousands of transactions.

7. Analyze Abandoned Checkouts for Insights

Shopify’s abandoned checkout feature is often underutilized. It’s a treasure trove of data for understanding why customers leave without completing their purchase.

What to Look For

• Cart Totals: Are customers abandoning just below your free shipping threshold? Adjust it accordingly.

• Checkout Flow: Identify common drop-off points and optimize for ease of use.

Conclusion: Small Tweaks, Big Wins

Improving your AOV isn’t about reinventing the wheel—it’s about making smart, incremental changes. By adding tipping, optimizing upsells, personalizing flows, and testing pricing, you can unlock hidden revenue and significantly boost your profitability.

Remember, every small improvement compounds over time. Start with one strategy today and build from there. Your bottom line will thank you.