Minimum Order Value (MOV)

Minimum order value, or MOV, is the minimum amount that the shoppers need to spend on a website or app to checkout successfully or place an order. In hopes of getting more orders, several merchants accompany MOV with the added benefit of free shipping to motivate customers to spend the amount they want them to. These are additional incentives merchants can configure when setting up their shipping rules and costs.

If you have set up fees for each business transaction, it is important to set minimum order values for each order.

  • Setting a minimum order value ensures that the cost of goods sold (COGS) is not too high for each order placed
  • MOV helps online retailers avoid losing money on smaller orders
  • MOV helps increase order size so that customers can meet the minimum order value requirement
  • It reduces the risk of profit margin loss by establishing MOV after analyzing the customer’s average spend and the average delivery cost
  • Motivating customers to spend a minimum amount on their order to get free shipping will instantly boost the chances for more conversions

To explain MOV better, let’s take a few simple examples.

  • If you have set the MOV as $40 and a customer has added products worth $30 to the store cart, they will be notified to add products worth $10 more to get free shipping or check out successfully.
  • If you want to earn at least $10 per order and the products you sell for $3 cost you $1 each, you need to sell at least 5 items to achieve your target profit goals. That means your minimum order value for this example is $15.

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