Average Units Per Item (AUPI) is a key performance indicator (KPI) that reveals the average quantity of a particular product included in a single order on an e-commerce platform.
By deciphering the AUPI, businesses can gain a clearer understanding of customer buying patterns for individual products. This metric is particularly useful for creating targeted offers and promotions to increase the average cost of the order.
Key Takeaways
- Definition: Average Units Per Item (AUPI) reflects the average quantity of a specific product included in a single order on an e-commerce platform.
- Calculation: AUPI is calculated by dividing the number of units sold by the total number of paid orders.
- Strategic Importance: AUPI helps companies understand product-specific buying patterns, enabling tailored promotions, effective inventory management and informed pricing decisions.
- Optimization Strategies: Improving AUPI can be achieved through strategies such as volume discounts, product bundling, limited time offers, exclusive membership offers, and displaying positive customer feedback and reviews.
- Limitations: AUPI doesn’t reflect the full range of products, can be influenced by promotions, doesn’t differentiate between product variants, omits product return data, is subject to seasonal fluctuations, doesn’t indicate overall sales performance, can lead to neglect of other metrics, and doesn’t account for product profitability.
- Complementary Metrics: AUPI should be evaluated alongside metrics such as product return rate, customer satisfaction score (CSAT), and net promoter score (NPS) for a comprehensive view of product performance and customer behavior.
Why does Average Units Per Item matter for your business?
For ecommerce businesses, comprehending and optimizing AUPI presents several advantages:
- Insight into Product Popularity: By tracking the AUPI, businesses can gauge which products are commonly bought in bulk, indicating their popularity among consumers.
- Promotion Strategy: Recognizing products with a high AUPI allows businesses to craft special deals or bundled offers, enticing customers to increase their order value.
- Inventory Management: A consistent AUPI for certain products can assist businesses in managing inventory more efficiently, ensuring that popular items are always in stock.
- Tailored Marketing: Knowledge of AUPI can aid businesses in designing product-specific marketing campaigns, targeting customers who frequently buy products in larger quantities.
- Pricing Decisions: Understanding the average units of a product per order can guide pricing strategies, especially in terms of volume discounts or bulk purchase incentives.
How to calculate Average Units Per Item (AUPI)?
Explanation of the parts of the formula:
- Number of units sold represents the total quantity of a specific product that has been sold. This could be over a specific timeframe, such as a day, week, month, or any other duration.
- Total Paid Orders denotes the total number of orders that were successfully completed with a payment on the ecommerce platform. In other words, these are orders where a product was selected, added to the cart, and then successfully purchased by the customer.
- The ratio gives an average of how many units of a specific product are included in a single order. This value provides insight into the buying patterns of customers for that product.
In essence, the Average Units Per Item (AUPI) metric helps businesses gauge how often a specific product is purchased in bulk or multiple times in a single order. A higher AUPI might indicate that the product is popular for bulk buying or that promotions encouraging buying in larger quantities are effective.
Example Scenario
Imagine that in a certain month for a particular product:
- The total number of that product’s units sold was 2,500 units.
- During the same timeframe, there were a total of 1,200 orders containing that product.
Insert the numbers from the example scenario into the formula:
- Average Units Per Item (AUPI) = 2,500 units / 1,200 orders
- Average Units Per Item (AUPI) = 2.08
This means that on average, each order containing this specific product had approximately 2.08 units of that product during this month.
Tips and recommendations for optimizing Average Units Per Item
To realize the potential of the AUPI metric, consider the following strategies:
Volume discounts
Volume discounts can be a powerful strategy for increasing your average unit price (AUPI). By offering progressive discounts based on the quantity purchased, customers are incentivized to buy more units of a particular item. This approach not only increases immediate sales, but can also encourage a customer’s habit of buying in larger quantities, resulting in a long-term increase in AUPI.
Product bundling
Product bundling is another effective way to maximize AUPI. By combining high AUPI items with complementary products and selling them as a set at a slightly lower price, customers are encouraged to make bulk purchases. This approach can also help promote lesser-known products alongside popular ones, increasing their visibility and potential sales.
Limited time offers
Limited-time offers can create a sense of urgency among customers, encouraging them to buy more units to take advantage of a great deal before it expires. By introducing such promotions, especially on high AUPI products, you can encourage larger purchases. This strategy not only boosts short-term sales, but can also attract new customers who are drawn to the time-sensitive offers.
Exclusive membership offers
Exclusive membership offers can be an effective way to reward loyal customers while increasing AUPI. By offering special deals or volume discounts exclusively to members, you encourage them to continue their support and make larger purchases. This strategy helps increase customer loyalty while increasing your average unit price per item.
Feedback and reviews
Feedback and reviews can significantly influence a potential buyer’s decision. By displaying positive customer experiences or high ratings for high AUPI products, you provide social proof of the product’s quality or value. This encourages potential buyers to trust the product and make larger purchases, thereby increasing AUPI. Regularly collecting and displaying customer feedback can therefore be a key component of your AUPI optimization strategy.
Examples of use
Seasonal Promotions:
- Scenario: An ecommerce platform selling winter gear notices that a particular thermal sock has an exceptionally high AUPI during colder months.
- Use Case Application: The platform could create a “Winter Bundle” promotion, combining these socks with other winter essentials, encouraging customers to purchase in larger quantities while preparing for the season.
Loyalty Programs:
- Scenario: A beauty ecommerce store identifies a high AUPI for a specific brand of face masks.
- Use Case Application: The store can introduce a loyalty card where buying a certain number of face masks earns the customer a free mask or a discount on their next purchase, incentivizing bulk buying.
Subscription Models:
- Scenario: An online tea store identifies a high AUPI for a particular blend of herbal tea.
- Use Case Application: By offering a subscription model where customers receive a monthly supply of this blend at a discounted rate, the store can ensure consistent sales and potentially increase the AUPI further.
Flash Sales:
- Scenario: An online bookstore identifies a high AUPI for certain genres during holiday seasons.
- Use Case Application: The store can host flash sales for these genres, offering discounts for bulk purchases, thereby enticing customers to buy more units in a single order.
Collaborative Promotions:
- Scenario: An ecommerce platform specializing in kitchen appliances identifies a high AUPI for blenders.
- Use Case Application: Collaborating with a popular health influencer to promote a special “Healthy Living” package, which includes the blender and other health-centric products, can boost sales and increase AUPI.
Average Units Per Item SMART goal example
Specific – Increase Average Units Per Item (AUPI) by 20% (from an average of 2 units per order to 2.4 units per order).
Measurable – AUPI will be monitored and compared before and after new marketing and sales strategies are implemented.
Achievable – Yes, by introducing product bundling, volume discounts and targeted promotions for bulk purchases, as well as optimizing product placement and recommendations on the site.
Relevant – Yes. This goal aligns with the quarterly goal of improving customer shopping behavior and increasing sales without necessarily increasing the number of individual orders.
Timed – Within the next three months of implementing the strategies.
Limitations of using Average Units Per Item
While the Average Units Per Item (AUPI) is an essential metric for understanding product-specific purchasing patterns in an ecommerce setting, it has its limitations when used in business analysis:
- Doesn’t Reflect Entire Product Range: AUPI focuses on the average units of a specific product in an order. It doesn’t capture the diversity or range of products that customers might be purchasing in a single order.
- Can Be Influenced by Promotions: If a particular product is on a limited-time promotion or discount, the AUPI might be artificially high during that period. Once the promotion ends, the AUPI might drop, which can be misleading if not contextualized.
- Doesn’t Differentiate Between Different Product Variants: AUPI doesn’t specify if customers are buying different sizes, colors, or versions of a product. This distinction can be crucial for inventory management and marketing.
- No Insight into Product Returns: A high AUPI might suggest that customers are buying a product in bulk. However, if there’s a high return rate for that product, the AUPI doesn’t provide a clear picture of actual sales.
- Subject to Seasonal Variations: Like AOV, AUPI can also vary seasonally, especially if a product is particularly popular during certain times of the year, such as holiday seasons or back-to-school periods.
- Not Indicative of Overall Sales Performance: A high AUPI for a particular product doesn’t necessarily mean that the overall sales performance is strong. It could be that one product is performing exceptionally well, while others are underperforming.
- Overemphasis Can Lead to Neglecting Other Metrics: While focusing on increasing the AUPI, businesses might overlook other crucial metrics like customer satisfaction, product reviews, or net promoter score. It’s essential to consider a balanced set of metrics.
- Doesn’t Account for Product Profitability: Just because a product has a high AUPI doesn’t mean it’s the most profitable. Costs associated with production, storage, and shipping might mean that even with a high AUPI, the product isn’t contributing significantly to the bottom line.
In summary, while AUPI is a useful metric for understanding product-specific buying behavior, it should be considered alongside other metrics for a holistic understanding of e-commerce performance. It shouldn’t be the sole driver of business decisions.
KPIs and metrics relevant to Average Units Per Item
- Product Return Rate: This metric provides insights into the percentage of products that are returned by customers. If a product has a high AUPI but also a high return rate, it could indicate quality issues or misaligned customer expectations.
- Customer Satisfaction Score (CSAT): A high AUPI combined with a high CSAT indicates that customers are not only buying the product in bulk but are also satisfied with their purchase.
- Net Promoter Score (NPS): This gauges the likelihood of customers recommending the product to others. A high AUPI for a product with a high NPS can be a positive sign for the business.
Taking AUPI into account alongside these metrics can offer a more holistic understanding of product performance and customer behavior.
Final thoughts
Average Units Per Item (AUPI) is a powerful metric that provides insight into customer purchasing patterns for specific products. By leveraging this metric, businesses can make informed decisions about promotions, pricing, and inventory management, ultimately improving the overall shopping experience and increasing revenue.
Average Units Per Item (AUPI) FAQ
What is Average Units Per Item (AUPI)?
AUPI gauges the average quantity of a specific product purchased in a single order on an ecommerce platform.
How can understanding AUPI benefit my ecommerce business?
AUPI offers insights into product-specific buying behaviors, enabling businesses to tailor promotions, pricing, and inventory strategies to enhance the average cost of orders.
How can I optimize the AUPI for my products?
Implementing volume discounts, product bundling, exclusive offers, and feedback-driven strategies can help in optimizing the AUPI.
Can AUPI be used in conjunction with other metrics?
Absolutely. Combining AUPI with metrics like Product Return Rate, CSAT, and NPS can provide a comprehensive understanding of product performance and customer satisfaction.
If my AUPI is high for a product, does it mean the product is popular?
A high AUPI can indicate the product’s popularity, but it’s essential to consider other metrics like return rate and customer reviews to get a complete picture.