Average Order Value (AOV)

For B2B sellers ready to increase revenue through their online platforms, Average Order Value (AOV) is a foundational metric for sustainable growth. 

While many other measurements like conversion rate, cost of goods sold, and cart abandonment all matter, AOV directly impacts profitability and scalability. Let’s look at AOV more closely and how you can measure and improve it.

What is Average Order Value?

AOV measures the average amount spent per transaction over a specific period. The calculation is straightforward:

• AOV = Total Revenue / Total Number of Orders

A B2B platform selling industrial equipment that generates $500,000 in revenue from 100 orders in a month would have an AOV of $5,000.

Why AOV matters in B2B

The impact of AOV varies based on your business model and industry. Construction suppliers might see AOVs in the hundreds of thousands due to bulk material orders, while food service suppliers manage smaller but more frequent orders.

Regardless of industry, tracking and improving AOV can offer significant benefits:

1. Revenue growth without new customer acquisition: A higher AOV means generating more revenue from existing customers. This reduces customer acquisition costs—the money spent on marketing and sales to bring in new business. For example, if your average order increases from $1,000 to $1,500, you’ll generate 50% more revenue from the same number of customers.
   
   
2. Supply chain benefits: Larger orders often reduce costs throughout your supply chain. When customers order in bulk, you can optimize shipping by filling trucks completely, negotiate better rates with suppliers, and reduce the number of individual shipments you process. Think of a distributor shipping cleaning supplies—sending one full truckload costs much less per item than multiple partial shipments.
   
   
3. Customer lifetime value (CLV) improvement: CLV represents the total revenue you expect from a customer over your entire relationship. AOV directly influences this number—if a customer places larger orders, their value to your business increases. This matters particularly in B2B where relationships often span years or decades.
   
   
4. Lower operational costs per sale: Processing orders takes time and resources, regardless of size. When customers place larger orders, you spread these fixed costs across more revenue. Processing a $5,000 order often requires similar effort to processing a $500 order, making the larger order more profitable.

Modern B2B platforms help streamline large orders. For instance, Socoda’s wholesale platform lets their 200+ distributors place and manage bulk purchases efficiently. This system helps both Socoda and their customers save time and reduce errors on large orders.

Strategic approaches to increasing AOV

Of course, every business is different, but there are several potential options you should consider for increasing AOV.

1. Product bundling for different business sizes

Product bundling means combining multiple items into a single offering. This can look different based on customer size and needs:

For small businesses (Under 50 employees):

• Create starter bundles that combine essential products new businesses need
• Set up monthly subscription bundles for regularly-used items
• Include training or support services with product purchases

For example, an office supply company might bundle a printer with a year’s supply of ink and paper, making it easy for small businesses to solve their printing needs in one purchase.

For enterprise customers (500+ employees):

• Design custom product packages that work across multiple departments
• Develop annual supply agreements with volume-based pricing
• Add enterprise-level service packages like priority support or dedicated account management

2. Smart minimum order values

Setting strategic minimum order values helps encourage larger purchases while maintaining profitability. For example, many wholesale distributors adjust minimum orders based on factors like shipping zones and order frequency.

Rather than setting one minimum order size for everyone, consider varying your minimums based on:

• Distance from your warehouses (higher minimums for distant customers offset shipping costs)
• Product categories (higher margins can support lower minimums)
• Customer purchase history (reward consistent buyers with lower minimums)
• Seasonal demand (adjust minimums during peak and slow periods)

3. Modern B2B pricing strategies

Socoda, with their network of more than 200 independent distributors, demonstrates how a modern B2B platform can handle complex pricing and ordering requirements. Their system allows distributors to design and manage their own online shops while maintaining consistent pricing and ordering processes across the network.

Advanced pricing approaches include:

• Contract-specific pricing that reflects negotiated terms with each customer
• Volume-based discounts that automatically apply as order size increases
• Dynamic pricing that adjusts based on market conditions and inventory levels
• Multi-product package pricing that rewards buying across categories

4. Smart product recommendations 

These systems analyze past purchases and current cart contents to suggest additional items. They might show:

• Products frequently bought together (like suggesting safety glasses with power tools)
• Bulk purchase options (showing volume discount tiers)
• Complementary items (proposing mounting hardware with shelving units)

5. Simplified reordering 

Features that make large orders easier to place:

• Save common orders as templates for quick reuse
• Enable single-click reordering of past purchases
• Set up scheduled recurring orders for regular supplies

6. Real-time inventory information 

Give customers confidence to place large orders by showing:

• Current stock levels across all warehouses
• Expected dates for incoming shipments
• Available quantities for bulk purchases

7. Measuring improvement

Track these metrics alongside AOV to understand the full picture:

• Order frequency: How often customers buy
• Product category penetration: Which types of products customers buy together
• Customer segment performance: How different customer groups order
• Seasonal buying patterns: When order sizes typically increase or decrease

Jeff de Bruges uses their B2B platform to monitor these patterns across 520 stores. This data helps them make informed decisions about which products to stock and how to price them.

Using DJUST to Improve AOV

DJUST offers comprehensive features that can help you effectively manage and increase your AOV. For example, its dynamic pricing and order management capabilities allow businesses to easily implement tiered pricing and bundle offerings. 

With its user-friendly interface, B2B clients can set up promotional campaigns tailored to boost average order value, track their effectiveness, and adjust strategies as needed. 

Additionally, the platform's customer relationship management tools enable you to understand your clients better, tailoring your offerings to their specific needs and preferences.

Conclusion

Your approach to increasing AOV should match your business goals and customer needs. A food service supplier might focus on increasing order size through product bundling and minimum order values. An industrial equipment provider might emphasize service packages and volume discounts on expensive items.

Success requires more than implementing these strategies—you need to continuously test and adjust based on customer feedback and performance data. Modern B2B platforms like DJUST provide the tools to experiment with different approaches and measure their impact on your business.

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