When you’re struggling to keep your head above the water and your Amazon store afloat, it can be tempting to think that new customers are the answer. But constantly drawing in fresh custom is both expensive and time-consuming. Breathe. Take a look at your existing client base. You already did the work of introducing these people to your brand. Are you taking full advantage of your work so far?
In truth, it’s not just about how many customers you have: it’s about how much they spend when they shop from you. The good news is this is something you can track.
We’ll cover what average order value is and, more importantly, how to make sure that your average Amazon order value is increasing.
What is average order value?
Average Order Value (AOV) is the average amount that a customer spends per transaction when purchasing your products on Amazon. This is a useful metric for tracking sales engagement and understanding your customers’ behavior.
How to calculate average order value
Sum up the total revenue generated
How much money have you made on Amazon in total? For this example, let’s say you’ve made $600.
Count the number of orders
How many orders was this across? Let’s say there were 30 orders.
Divide the total revenue by the number of orders
Divide the total revenue by the number of orders. So: $600/30 = 20. In this example, AOV = 20.
Analyze the calculated average order value
But what does this mean? What is good AOV? The average order value across all Amazon transactions in the US was $47.31. This suggests that a good average order value would be $47 and higher.
However, AOV is not black and white – every business is different.
Rather than aiming for an arbitrary number, set targets and benchmarks specific to your business. For example, try calculating AOV every month. If you’re seeing an upward trend, then you’re doing something right! On key dates for Amazon sellers, like Black Friday, it’s worth switching to daily monitoring.
How to Increase Average Order Value on Amazon: 10 Proven Strategies
So, how do you make sure that your AOV keeps going up? Here are ten practical and proven strategies.
1. Provide discounts for bulk purchases and bundles
Customers love bundles – why buy one item for $7.50 when you can get a set of three for $15? You want to increase your average order value by encouraging customers to buy more items. Everybody wins.
The trick is to offer a combination of products which create an all-in-one solution or experience.
For example, when you buy a local phone number from Dialpad, all of your essential communication tools are included in the bundle. So, with an area code 832 number, customers are also offered easy call forwarding, visual voicemail, real-time call transcription, and more – the idea being that all their needs are met by one unified solution.
Similarly, a store selling toiletries might bundle skincare products or soaps. The store sells more products, and the customer does not have to research or shop around for everything they need.
2. Offers exclusive deals through email marketing
If you want your customers to not only shop from you regularly but also spend more on average each time, you need to promote and reward loyalty. But building brand loyalty isn’t always easy, especially in a crowded marketplace like Amazon.
Email marketing is the perfect vehicle to check in, ask for feedback, and possibly take the opportunity to cross-sell more items from your catalog. Amazon already sends follow-up emails, asking “Did your recent Amazon order meet your expectations?” but the best sellers add a personal touch to this blueprint. Why not go the extra mile and offer customers exclusive deals on their next purchases?
Learn more about amazon email marketing strategies to boost sales and grow your brand.
3. Optimize Product Listings
To increase your Amazon Average Order Value, you need to show your customers that your products are worth the money. High-quality product listings lead to higher-value purchases. So, make sure both your copy and your photos are clear and classy.
Regarding product listings, you want to use keywords to optimize your copy for SEO. At the same time, don’t sacrifice substance – this is your chance to advocate for your product and convince customers that it is worth clicking “add to cart”.
Your product listing should speak to your product’s unique selling point and the problem it solves. For example, a company selling AI solutions might explain how their product eliminates the need for transcription software since you can use AI to transcribe audio.
Whether you’re building a new product listing or looking to optimize an existing one, Viral Launch has all the seller solutions you need.
4. Implement cross-selling and upselling techniques
Cross-selling and up-selling are the backbone of most sales techniques. Imagine you’re at a restaurant. If the waitress asks, “Would you like fries with that?” that’s upselling. If they ask, “Would you like to upgrade to an XL soda for 1 dollar more?” that’s upselling.
In both cases, it’s all about nudging customers to buy complementary or upgraded versions of the products they were already about to purchase. Promoting extra products at the time of purchase is a great way to increase your Amazon Average Order Value without needing to raise prices.
Try not to be pushy. Recommend, like a friend might, with personalized product recommendations which genuinely pair well and will enhance their experience.
For example, a business providing virtual communication tools might direct buyers towards bundles that include premium features like enhanced file sharing or free video chat – not only enticing users to upgrade but also simplifying their experience.
In the image above, the additional accessories elevate the purchase from a simple pair of wings to a coordinated elven costume!
5. Use personalized product recommendations
Personalized recommendations are generated depending on factors like the user’s individual browsing history, previously purchased items, and the behavior of similar customers.
Generally, if a customer looks at an item – say, a pink yoga mat – then the algorithm will bombard them with similar items until they land on the one they can’t resist. To increase the likelihood of your own products showing up in these recommendations, make sure you list all the variations of your goods. If you have separate listings for ‘blue yoga mat’, ‘purple yoga mat’, etc, then it is more likely that some variation of your item will be shown and added to the cart.
6. Set a minimum for free shipping eligibility
The promise of “free shipping” is often enough to entice customers to add more items to their cart than originally planned. Use a notification at checkout to let customers know if their order does not meet the minimum spend for free shipping eligibility.
Setting your threshold a little higher than your current average order value makes sense. If your AOV is $24, for example, offering free shipping on orders $30 and over might be just the push your customers need to spend a little extra.
On the other hand, be careful not to set the threshold too high. In the above example, the majority of customers spending $15 will abandon their carts rather than spend an extra $15 to receive free shipping.
If your products are eligible for Prime (another great way to boost sales and average order value), then shipping is already free. So, get creative: you could instead offer a set discount for orders over a certain threshold. For example, maybe a 10% discount for orders over $60.
7. Introduce a customer loyalty program
Imagine you are looking to make a big purchase. Are you more likely to take a chance on an unknown brand, or use a tried and trusted Amazon store which actively rewards returning buyers?
That’s why it’s worth implementing a loyalty program to reward customers for their repeat business. Show that you care with coupons or discount codes, and you should see the difference in your AOV.
Take the time to think specifically about your customers and what they are looking for. For example, if you were an online store operating in Hong Kong, then a Hong Kong domain name would be a green flag to locals looking for brands they can trust.
Alternatively, if you were looking to expand your business in this area, you could advertise your business in Hong Kong, and leverage your customer loyalty program, to attract new customers and increase your average order value.
8. Create urgency with limited-time offers
Time-sensitive deals are a proven way to create a sense of urgency, compelling customers to act before the deal expires. As a result, they are likely to spend more per transaction.
Time-limited offers can be anything – flash sales, limited-time, discounts, special offers – as long as the clock is ticking. One way to do this for your Amazon store is to take advantage of Amazon’s lightning deals if your store is eligible. These are displayed under “Today’s Deals” and tend to be snapped up incredibly quickly.
9. Optimize Pricing Strategy
Of course, when you’re increasing your average order value, you’re going to have to think about your prices. Some may think (or hope) that if they increase the price of an item, customers will continue to buy that same item as before, leading to higher costs.
Unfortunately, it may not always be this way. A more thoughtful way to proceed could be to implement dynamic pricing – a strategy where the price of a product fluctuates depending on factors like market conditions and customer behavior.
For example, integrating dynamic pricing tools alongside website builders can help optimize product prices based on real-time data, ensuring competitive pricing strategies that drive sales and contribute to increasing your AOV.
Say your AOV is $23, and your best-selling product usually goes for $23. There may be days when the same product would sell for $30. If the price appears the same regardless of market conditions, you’ll only ever sell it for $23 – when, really, your AOV could be increasing.
Fortunately, Amazon has plenty of dynamic pricing tools which your store can integrate to ensure that each product is displayed at the optimal cost to tempt the customer at the time of their search – meaning more sales and higher AOV.
Check out the below episode of The Seller’s Edge Podcast where discuss the future of selling with next-gen pricing tools.
10. Create a smooth checkout process
Once the customer has filled their cart, you want them to follow through and place the order. To avoid high cart abandonment, make sure the checkout process is as smooth as it can be. Since Amazon has implemented a one-click checkout system, this couldn’t be easier. Just make sure that if your website is attached, the two are compatible without unnecessary snags.
The key is keeping the customer happy. And because no matter how careful you are, things can fail, it’s important to have a remote support system to ensure that help is never far away if a customer experiences any difficulty placing or tracking their order.
Additionally, be vigilant in monitoring and addressing pre-arbitration chargeback cases to minimize potential disputes and maintain customer trust.
Final Thoughts
With these strategies, you can increase your Amazon average order value, therefore increasing your revenue and profits without the need for new customers.
It’s all about rewarding loyalty and making it easy for your existing customers to fill their carts with your products, spending more each time they buy.
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