The Minimum Order Value is the lowest acceptable cost of goods that must be added to the cart in order to place an order. If a buyer adds items to the cart whose total cost is below the minimum order amount, they will not be able to purchase them. For example, if the Minimum Order Value is $30, a buyer will not be able to order items worth $25 from the store.
Minimum Order Value is necessary for online stores that sell a large number of inexpensive items. It is not profitable for sellers to process orders with low values, which is why they set a minimum order amount. This feature helps to increase the average order value of an online store and sell products with low margins. Minimum Order Value is often used in combination with free shipping to incentivize customers. For example, place an order of $50 and get free shipping. Wholesale online stores may also use minimum order amounts to weed out retail customers.
Minimum Order Value can be set for individual categories of products that are too cheap to purchase individually. For example, an online store will not ship a single pack of plastic cups because the cost of doing so will be higher than the revenue from the sale. Online stores need to calculate the Minimum Order Value required to ensure profitability. However, this figure should not be set too high to avoid deterring customers.