Average Selling Price vs Average Order Value
Average Selling Price (ASP) and Average Order Value (AOV) are similar but distinct metrics that measure different aspects of a business's sales performance. ASP focuses on the average price of individual products or services sold, calculated by dividing total revenue by the number of units sold. AOV, on the other hand, measures the average total spent per transaction or order, calculated by dividing total revenue by the number of orders, regardless of how many items each order contains.
A software company should use ASP when analyzing pricing strategy for specific products, such as determining if premium versions are gaining traction or if discounting is affecting overall product value perception. Meanwhile, AOV would be more appropriate when the company wants to measure the effectiveness of cross-selling or upselling strategies, as it reveals whether customers are adding more items to their shopping carts. For example, if the software company notices their AOV increasing while ASP remains stable, it suggests customers are purchasing more products per order rather than spending more on individual products.
Average Selling Price
Average Order Value
What is it?
Average Selling Price (ASP) is the average price a given product is sold for. This metric can be applied narrowly to a product or service or, more broadly, to an entire market. It's a common metric, often used to compare businesses or channels and is particularly interesting as a reflection of what consumers will pay for similar products or services.
Average Order Value (AOV) indicates the average amount of money spent on an order, either over a set period or over the lifetime of an e-commerce store. This is calculated by taking the total revenue and dividing it by the number of orders placed within the determined period.
Who is it for?
Categories
Formula
Example
A luxury watch maker is able to demand an ASP of $3,900 per watch by selling 20 watches at $3,000 and 5 watches at $7,500 each month. Compare this to a high volume watch manufacturer, who sells 2,500 watches at $50 and another 7,500 at $30 each; resulting in an ASP of $35.
Example 1: From Nov 1, 2020 to Nov 30, 2020 Company ABC had $45,000 in Revenue over 450 orders. For this customer, the average order value in November is $100 per order. Since the end of November is the typical busy season for an e-commerce business, This company can also look at the average order value over the month or compare weeks 1-3 with the last week in November. Example 2: Nov 1, 2020 - Nov 25, 2020 Company ABC had $35,000 in Revenue over 400 orders. The average order value over this period is $87.50 per order. After the holiday season started on Nov 26, 2021 - Nov 30, 2021, Company ABC had $10,000 in revenue over 50 orders. The Average Order value over this period was $200 per order. This means that Company ABC each year can expect a significant increase in average order value over the holiday period.
Track this metric
Published and updated dates
Date created: Oct 12, 2022
Latest update: Mar 15, 2024
Date created: Oct 12, 2022
Latest update: Apr 10, 2025