Order value growth is useful only when contribution stays healthy. This guide helps teams design promotions that increase profit, not only basket size.
Primary tool: AOV Calculator
What this guide checks
- AOV lift versus contribution margin impact.
- Discount design impact on blended order profitability.
- Sensitivity to return rates and fulfillment cost.
Signals that should trigger a second look
- AOV rises while gross profit per order drops.
- Promo success depends on high return-rate cohorts.
- Free-shipping threshold erodes margin at checkout.
Common mistakes
- Evaluating promo by conversion rate alone.
- Ignoring fulfillment and payment fee changes at different basket sizes.
- Not segmenting new vs returning customers in promo analysis.
Real scenarios
Bundle promo redesign
Bundle increased AOV by 18% but reduced margin. Revised mix with lower discount preserved most uplift and restored profitability.
Free shipping threshold test
Raising threshold increased basket size and maintained contribution after packaging cost updates.
Mistake vs better approach
| Scenario | Common mistake | Better approach |
|---|---|---|
| AOV optimization | Push deeper discounts to raise basket value. | Use bundle design and threshold rules with margin floors. |
| Promo reporting | Report conversion and AOV only. | Add contribution per order and refund-adjusted profit. |
Decision guidance
Low concern
Promo increases both AOV and contribution per order.
Medium concern
Promo increases volume but margin is fragile.
High concern
Promo drives unprofitable orders despite topline growth.
Trust workflow (after you get a number)
- Model baseline order economics first.
- Test promo variants with realistic return assumptions.
- Compare contribution, not only AOV uplift.
- Deploy guardrails (min margin threshold, max discount depth).