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How to Boost Average Order Value with Multi-Channel Listing Software | Jazva

What’s your playbook for ecommerce success? It probably begins with enticing and converting customers, and ends with retaining them. Along the way, you’ll look to increase average order value.

Why you have to focus on raising order value

But how do you get the most from each customer order? And why even bother raising average order value in the first place? Unless you're Amazon, you have to focus on elevating order value if you don't want your shipping and infrastructure costs to eventually gobble up your margins.

Think of it this way: Even if you are getting a huge amount of orders, this major order volume is actually very expensive, considering all the labor, listing and inventory management required to sustain it. The only way out is to increase order value without simultaneously turning off customers.

This is a tough balancing act:

  • Initial conversion is already difficult, thanks to issues such evolving search engine algorithms. Even if you do everything right, you're still looking at a conversion rate between 1 and 2 percent, according to BigCommerce.
  • Meanwhile, poorly managed attempts at boosting order value can drive potential shoppers away. The devil is often in the details: A Corra study found that a lack of full transparency about prices and promotions, as well as surprisingly high shipping costs, are among the most common ecommerce turnoffs.

This is where an ecommerce automation solution enters the picture. With benefits such as top-notch multi-channel listing software, it helps you capitalize on your strategies for lifting order value and still keep customers.

There are many good options here for immediately boosting order value. Let's dive into a few of them in more detail:

1. Set a threshold for free shipping to increase order value

Free shipping is usually more important than fast shipping, as we discussed in a previous post. The UPS Pulse of the Online Shopper survey from June 2017 found that "shipping fees" were the second-most important consideration when selecting products online, trailing only prices. Fees are also a leading cause of cart abandonment. On the other hand, setting a realistic minimum order amount for free shipping naturally increases average order value.

The question, of course, is where to set the threshold. Setting it too low means you have to eat the shipping costs. Setting it too high could make loyal buyers feel like they're being exploited.

There is no one-size-fits-all magic level at which to set free shipping. But you can discover one that works for you by reviewing order histories, finding the best carriers and getting detailed financial reports on product margins, from a convenient dashboard - all of which you can do with a comprehensive multi-channel inventory management platform.

2. Offer volume-based discounts

A well-designed volume discount is often a win-win:

  • Shoppers get more of a product at a lower per-unit cost.
  • You can clear out excess inventory and maybe get a better deal on shipping expenses.
  • Most importantly, you can increase average order value.

Paperstone once ran an A/B test for bulk discounts. It found that its variation page - the one with the discount - increased average order value by almost 19 percent, according to a VWO analysis of the results.

Volume discounting has its risks. For starters, you'll have to watch both your profit margins and your inventory control systems to ensure sustainability and sufficient stock.

But with multi-channel inventory management and order fulfillment software, doing so is more straightforward than ever. For example, you can more easily process these discounted orders in bulk, and also pick, pack and ship them on time. This is undoubtedly a great ecommerce growth hack which improves satisfaction and retention, while facilitating long-term increases in average order value.

3. Personalize the experience with cross-sells and upsells

"You might also like…" and its variants are an inescapable part of the online experience, and not just in e-commerce. The personalization they provide has been key to the success of every platform from Amazon to Netflix. It's also a major source of revenue, serving as a great way to increase average order value.

A Forrester analyst once estimated that targeted recommendations as a whole accounted for as much as 30 percent of all e-commerce site revenues. Beyond that, these cross-sells and upsells can cultivate customer loyalty. They ensure that customers have everything they need to get the most value from what they ordered (e.g., getting separate razor blade refills to go with a razor handle).

In implementing cross-sells and upsells, automation is essential. Otherwise, you'll sink way too much time into manually entering all of the eligible items. Multi-channel listing software streamlines this process of updating thousands of listings across multiple websites. From there, your order fulfillment software and inventory control systems can take over and support efficient and sustainable operations.

4. Promote limited-time offers to boost average order value

Sayings like "but you must act now!," "while supplies last" and "if you call/order within the next 20 minutes" are well-worn cliches that originated in TV infomercials. They're not always presented in an appealing way that leads to conversation, but the underlying logic is solid - shoppers will act on a limited-time offer if it seems like a good value.

Time-limited promotions are excellent for boosting order value and they can work better in e-commerce than on TV. At the same time, it helps you deal with two common problems:

  1. Shopper procrastination: Consumers put off purchases until the last minute. In 2015, about half of respondents to an Ask Your Target Market survey reported still having some gifts left to buy mere days before Christmas.
  2. Lack of returning customers: Only a fraction of e-commerce visitors are returning ones - about 30 percent, according to MarketingSherpa. This means that it is imperative to maximize value from first-time shoppers. Limited promotions, perhaps offering steep discounts with a minimum purchase value until a set time, can be a useful tactic on this front helping increase average order value.

Like the other steps, we have listed here for boosting average order value, running these offers and deals requires reliable underlying infrastructure. Multi-channel listing software, inventory control systems and comprehensive order fulfillment fit the bill. They give you the power to reach as many customers as possible, raise order value and increase revenue sustainability across your operations.

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Albert Ong

Albert Ong

Albert Ong is the marketing manager at Jazva, an all-in-one ecommerce platform for multi-channel sellers. When not leading content strategy, Albert spends his time listening to audiobooks, writing science fiction, and binge-watching Netflix.