Average Order Value Per-Unit Formula
Learn how to calculate net average order value, average revenue per unit, average units per order, and refund rate from sales data.
This calculator measures the typical net value of a completed order and the revenue earned per unit sold. Using net sales rather than gross sales helps keep refunds and returns visible when reviewing sales performance for a consistent reporting period.
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Net Average Order Value
Where:
Subtract refunds and returns from gross sales to get net sales revenue, then divide net sales by the number of completed orders.
Variables Explained
| Variable | What It Means | Unit |
|---|---|---|
| grossSales - Gross sales revenue | Sales revenue before deducting refunds and returns for the reporting period. | currency |
| refundsReturns - Refunds and returns | The value of refunded, credited, or returned sales deducted from gross sales. | currency |
| numberOfOrders - Completed orders | The number of completed customer orders in the same reporting period. | number |
| unitsSold - Units sold | The total individual units included in completed orders during the period. | number |
Step-by-Step Calculation
Calculate net sales revenue
Deduct the value of refunds and returns from gross sales.
netSalesRevenue = grossSales - refundsReturns
Calculate average order value
Divide net sales revenue by completed orders to find net revenue per order.
averageOrderValue = netSalesRevenue / numberOfOrders
Calculate average revenue per unit
Divide net sales revenue by the total units sold to find net revenue per unit.
averageRevenuePerUnit = netSalesRevenue / unitsSold
Calculate average units per order
Divide units sold by completed orders to find the typical quantity in an order.
averageUnitsPerOrder = unitsSold / numberOfOrders
Calculate refund rate
Express refunds and returns as a percentage of gross sales. This measure requires gross sales to be greater than zero.
refundRate = (refundsReturns / grossSales) * 100
Example: Monthly online store sales
Net sales revenue
$50,000 - $2,500
$47,500
Average order value
$47,500 / 1,000
$47.50 per order
Average revenue per unit
$47,500 / 2,500
$19.00 per unit
Average units per order
2,500 / 1,000
2.50 units per order
Refund rate
($2,500 / $50,000) × 100
5.00%
Final Result
Net average order value is $47.50, average revenue per unit is $19.00, and average units per order is 2.50.
Assumptions
- ✓Gross sales, refunds, orders, and units sold all cover the same reporting period.
- ✓Only completed orders are counted; cancelled orders are excluded.
- ✓Net sales revenue equals gross sales less refunds and returns.
- ✓The entered sales amounts consistently include or exclude items such as discounts, shipping, taxes, and fees.
- ✓Each unit is counted consistently, including where products are sold in multipacks or bundles.
Limitations
- !The calculation does not show profitability because it does not deduct product costs, fulfillment costs, advertising costs, or payment fees.
- !Refund timing can affect a period's result when a refund is recorded in a different period from the original sale.
- !Averages can conceal large differences between product lines, sales channels, customer groups, or order types.
- !The calculation does not determine whether a particular accounting treatment is appropriate.
Common Mistakes to Avoid
Using gross sales directly for AOV when the intended metric is net AOV after refunds and returns.
Including cancelled or unpaid orders in the completed-order count.
Comparing a monthly AOV with a quarterly units-sold total.
Counting a three-item bundle as one unit in one period and three units in another.
Including sales tax or shipping in one period but excluding it in another.
Dividing refunds by net sales instead of gross sales when calculating the stated refund rate.
Related Formulas
Frequently Asked Questions
What is the formula for average order value?
Net average order value equals gross sales less refunds and returns, divided by completed orders: (gross sales − refunds and returns) ÷ completed orders.
How do you calculate average revenue per unit?
Divide net sales revenue by total units sold. Net sales revenue is gross sales less refunds and returns.
What is the average units per order formula?
Average units per order equals units sold divided by completed orders.
Should refunds be deducted from average order value?
For a net sales AOV measure, deduct refunds and returns before dividing by completed orders. Use the same treatment whenever comparing periods.
Why is average order value different from revenue per unit?
AOV measures net revenue per order, while revenue per unit measures net revenue for each item sold. The results differ when orders contain multiple units.
How is refund rate calculated?
Refund rate equals refunds and returns divided by gross sales, multiplied by 100.
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