When it comes to increasing sales, many entrepreneurs think that the fastest way to capture the market is to find lots of new customers. However, this is not the only way to develop a sustainable business. For retailers on e-commerce platforms, especially Print On Demand sellers, increasing AOV or increasing average order value will be the secret for businesses to thrive. So what is AOV and how to improve the AOV index? Let's find out with Printway right here!
One of the problems that many e-commerce business owners often overlook is tracking the total revenue that each order brings, without even realizing that this is an important factor to help their store break through. number.
What is AOV? Average Order Value is the average amount a customer spends on each order in your store. The AOV index usually directly affects the revenue that businesses generate, when AOV increases, sales revenue will increase and when AOV decreases, the revenue brought will also be proportional to this index.
To calculate the AOV for each order made at his store, sellers just need to divide the total revenue by the total number of orders, the specific formula is as follows:
Average Order Value = Total Revenue: Total Numbers of Orders
For example, if you own a Print On Demand t-shirt store with a total monthly revenue of $5200 with 130 products, the AOV would be $5200/130=$40. This $40 will be the average amount a customer spends when ordering at your store.
There is a reason to liken the AOV to the backbone of any business' growth circuit. If the AOV is high, this means that customers are buying more expensive products or buying more products from the business. On the contrary, if the orders are of low value, the business owner needs to work harder to attract customers and fulfill business goals.
Looking at the AOV index helps sellers or online retailers estimate revenue from websites, marketing campaigns, traffic, and conversion rates. When this index is at a stable level, sellers do not need to increase their marketing or sales expenses. AOV is also used by many marketers as a lever to grow their business. Some strategies to boost AOV are upselling, cross-selling, free shipping, discount with minimum orders, etc.
Improving a store's AOV can be done using a variety of methods. Here are some simple tips to help sellers boost sales and increase average order value effectively!
Buying goods without having to pay shipping fees has become a trump card in encouraging customers to order products. Especially for customers shopping on cross-border e-commerce platforms like Etsy or eBay.
This is quite understandable when the big Amazon has created for customers the habit of receiving goods in a short time with zero shipping fees. According to research conducted by BigCommerce - one of the leading e-commerce platforms, up to 84% of customers are willing to purchase with free shipping and 30% are willing to order more products for minimum value with a chance to get free shipping.
For POD sellers in particular and online retailers on e-commerce platforms in general, sellers can convince customers to increase AOV by providing a free shipping code when the order reaches the minimum value. Example: Free shipping on orders over $50, $150, or $200.
A useful way to both increase AOV and ensure sellers don't lose money with free shipping is to add 30% to the store's AOV. For example, if your store's AOV is $100, add 30% to it and get free shipping on orders with a minimum value of $130.
While promoting products to increase average order value may not sound intuitive and realistic. This is an effective way to increase AOV with conditions like “10% off when buying from two products, X% discount on orders from $300, or buy more than $30 to get $5 off the next product. ,..."These small tactics will help the store boost sales when customers try to buy more products to get a discount even though they have to spend twice as much.
For customers to make purchases without hesitation, sellers can take advantage of the FOMO (Fear of Missing Out) effect by limiting the duration of the promotion, offering limited opportunities, and emphasizing the product. Out-of-stock products or add on-sale features on your website to motivate purchases.
According to research by Smile.io, loyalty programs have the potential to increase AOV by 14%.
Loyal customers are customers with new customers who have used services and products and are willing to spend more money on subsequent orders. If you know how to take advantage of this existing customer base, the seller can increase the average order value without spending too much on marketing.
Loyalty programs can be free shipping for the 2nd order after the first order, 10-15% off for orders of minimum value, and points for every purchase. to receive gifts.
Upselling and cross-selling are the two most used methods to encourage customers to buy more products and add value to their orders.
Upselling is about encouraging customers to order more valuable products or more expensive products. For example, when selling pillows, sellers can upsell by encouraging customers to buy a set of pillows or a set of duvet covers, etc.
Cross-selling is a form of selling items related to the product that customers are buying based on their needs. For example, when a customer buys a shirt product, the seller can cross-sell it by selling more pants, socks or hats, etc. Cross-selling becomes more effective if the seller knows how to coordinate related products together in a visual way with pictures.
For example, instead of a T-shirt mockup, a seller can use an illustration of a model with some accessories such as hats, and scarves, or coordinate with the pants or products they are selling. Many customers tend to choose to buy ready-made clothes, this will help increase the value of the order simply and effectively.
Customers who tend to buy a lot in one order often need answers to many questions, such as whether the product is available in the color they want, what is the delivery time and what are the return policies. any. Sellers can create chatbots to automatically answer questions for customers 24/7 and respond to them directly when they have time.
Responding to customer inquiries promptly means higher sales potential and fewer abandoned carts.
Many customers often feel guilty about spending too much money during the shopping process. This feeling can cause them to hesitate when making a purchase decision and possibly give up on the purchase. However, if the seller can show customers how much money they can save by buying multiple products at once, they may change their minds and continue paying for the order.
According to some studies, up to 91% of customers regularly read product and service reviews, and up to 84% trust these reviews. 68% decide whether to use a product or service after reading one to six reviews.
To increase the average value of each order, sellers need to show customers the quality of the products and services they bring. Good reviews will be leveraged for customers to decide to order more products.
AOV can be seen as an essential metric in the business performance of any e-commerce business owner. Sellers need to closely monitor metrics related to AOV to promptly adjust marketing strategies, traffic, and order closing rates,...
The above article has explained what AOV is. The importance of AOV as well as several solutions for POD sellers in particular and online businesses in general promote the AOV index. Improving AOV is relatively easy, if you don't want to be a latecomer, start optimizing your AOV today. Printway believes that you can significantly increase sales from yourPrint On Demand store if you take advantage of the above methods. Good luck!