Define the revenue measure
State whether the order value includes taxes, shipping, discounts and adjustments according to the reporting system. Different tools can use different definitions. Keep the operational contribution calculation separate and explain the cost categories included.
Also distinguish orders from customers. A change in average order value does not show how many people bought or whether they will return.
Compare useful measures
| Measure | Question it answers |
|---|---|
| Average order value | How much reported revenue does an average order represent? |
| Contribution per order | What remains after the chosen variable costs? |
| Contribution per customer | How does value accumulate across purchases? |
| Return or refusal rate | Does the larger basket create poorer purchase quality? |
Evaluate an offer change
- Record the baseline definitions and eligible order population.
- Calculate product and fulfillment costs for the proposed basket.
- Include incentives and discounts in the comparison.
- Watch conversion, returns and delivery outcomes.
- Compare total contribution, not just the order-value percentage.
An indexed chart can communicate a relative change, but label the baseline and calculation. An index does not establish the underlying monetary amounts.
Worked example: more revenue, less contribution
Illustrative example: a 100-unit order has 60 units of variable cost, leaving 40 before advertising. A bundle sells for 130 but costs 95, leaving 35. Average order value rises while contribution per order falls. The business needs enough additional volume or repeat value to justify that tradeoff.
The example does not prove bundles are bad. It shows why revenue alone cannot answer the economics question.
Inspect the customer experience
Unwanted extras or confusing upsells can increase refunds and support work. Offer complementary products that help the customer's task and make additions optional and understandable. The basket should be useful, not merely larger.
Is a higher average order value always desirable?
No. It must be evaluated alongside conversion volume, costs and customer outcomes.
Should advertising cost be included in contribution?
Specify the version you use. A pre-advertising contribution measure and a post-acquisition measure can both be useful when clearly labeled.
Put this into practice
Calculate contribution for your most common basket and one proposed higher-value basket. Write the condition under which the second would improve the business rather than only the revenue metric.
Primary-source reading for platform details: Shopify: analytics field definitions.
Related foundation: Shopify conversion rate optimization: a practical store audit. How these guides are prepared.
Ayoub Mouhachtt
Growth & performance marketing. Explore the portfolio and working background.
Related portfolio work: Etsy & Shopify. The worked examples in this guide are illustrative and are separate from the portfolio’s project evidence.