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[MUSIC PLAYING] What is average order value? This is a term often used in e-commerce, and it's one of the most important metrics to know about your store. Average order value is the average amount that customers spend on your store with each order. When you increase your average order value or AOV, you'll solve a lot of problems you might be facing. Want to make more money?
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Increase AOV. Want to increase profit margins? Increase AOV. Want to spend less on ads? You guessed it. Increase AOV. So how do you do it? Here are a couple of key ways to drive this metric up today. Number one, upsells. In my opinion, offering upsells in bundles is a non negotiable in today's world.
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If you rely on selling just one t-shirt at a time, you'll likely be unsatisfied with the results and profits. Think about it this way. You could sell one t-shirt to 500 customers to make $10,000, or you could sell 3 t-shirts to only 160 people. I'll take the 160, because I'll save a ton on ads only needing to find 160 people as opposed to 500, right? There are many apps in the Shopify app store to offer upsells, and there are many different types upsells you can offer.
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You can upsell another item when your customer adds an item to the cart or visits the checkout page, or you can even offer a one click upsell after the customer has already made a purchase. A one click upsell requires nothing but, you guessed it, one click from your customer saying, yes, I want to add this to my order. The system remembers their payment info and simply adds the item to the order.
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An effective upsell is a second product that is complementary to the first product the customer is buying. Generally, offering more of the same product is not a good strategy, unless you're selling supplements or self care items. For example, if your customer is buying a t-shirt, offering a mug to go with it would probably work better than an additional t-shirt.
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You should start upselling today no matter what method you choose. Number two, building your email list. Yes, we're going there again. Remember that selling to repeat customers is up to five times cheaper than finding new customers. And statistically, repeat customers are much more likely to spend more money with you because they are already confident in your products. Emailing your list consistently is one of the best ways to increase sales and profits.
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Number three, lastly, creating a free shipping threshold in your store. This is by far the easiest way to get an immediate bump in your AOV. Simply allow the customer to qualify for free shipping if they spend $40 or $50. Place this announcement in the top bar of your Shopify store and even consider adding a pop up after the item is added to cart that says, wait, spend X more dollars to qualify for free shipping.
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This strategy works like a charm to easily tack on that second item. To recap, average order value is one of the most important things to focus on increasing in your business. The more you increase your AOV, the more revenue and profits you will see. I didn't mean for that to rhyme.
