Higher AOV spreads fixed per-order costs such as shipping and payment fees across more revenue, which lowers break-even ROAS. Bundles, thresholds for free shipping and well-chosen upsells are the usual levers.
Formula
AOV = Revenue ÷ Orders
Work backwards from a revenue target to the orders, clicks and ad budget it takes, and the ROAS that implies.
Related terms
- Break-even ROASBreak-even ROAS is the return on ad spend at which an order covers its variable costs and its acquisition cost, leaving zero profit.
- Conversion rateConversion rate is the share of visitors or clicks that complete a target action, such as a purchase.
Where this comes up
Operator's Notes, Issue 01: The storefront is moving, and you won't own itMeta, Google and OpenAI each made a move on who owns the moment someone decides to buy. What the agent race means for brands, the WhatsApp pricing change Indian D2C should act on, and a 60-minute agent-ready feed audit. ROAS is not a business metricReturn on ad spend tells you how the platform sees your campaigns. Contribution margin tells you whether the business is better off. Here is how to run paid media on the second.Part of the growth marketing glossary by Shiva Sharma.