On the Web: Supersize Me
Want to double your bottom line? Increase average order size by just 10 percent
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The second column shows what happens when that retailer is able to add $10 (10 percent) to its average order. Cost of goods and fulfillment go up proportionally, but it doesn't cost any more to generate the order; you've already spent whatever it took to get the shopper to check out. Overhead costs also stay fixed; your rent didn't go up just because the average shopper spent more. That 10 percent average order size increase resulted in a 100 percent increase in profits — from $4 to $8 per customer.
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Larry Kavanagh
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