What is a minimum order value? (and should your store have one)
A minimum order value is the smallest basket you will accept, and the arithmetic of shipping cost against margin shows whether you need one.
The meaning
A minimum order value, or MOV, is the lowest total a customer must reach before they can place an order. For example, "Minimum order Rs 299." Anything below that cannot be checked out.
It is different from a free shipping threshold. A threshold says "spend this much and shipping is free." A minimum says "spend at least this much or you cannot order at all." The post on free shipping threshold versus average order value covers the first idea.
Why a seller would want one
The reason is arithmetic. Every order carries costs that do not shrink when the basket does: packing material, your time, payment fees, and shipping. A tiny order can leave no profit at all.
A worked example
Say you sell small sachets of rose water. Each sells for Rs 99 and costs you Rs 45 to make and bottle. Your margin per sachet is Rs 54.
Now suppose the fixed cost of one parcel, counting a box, packing time value, and shipping you pay, is about Rs 70. All figures here are illustrative.
- One sachet: margin Rs 54, parcel cost Rs 70. You lose Rs 16 on the order.
- Two sachets: margin Rs 108, parcel cost Rs 70 (the box and shipping barely rise). You keep Rs 38.
- Three sachets, Rs 297: margin Rs 162, parcel cost Rs 70. You keep Rs 92.
Here a floor of around Rs 199 to Rs 299 makes sense, because a one-sachet order loses money. The exact number comes from your own costs, not from this example.
How to find your own floor
- Calculate margin per unit: price minus the cost of making or buying it.
- Estimate cost per parcel: packaging, shipping, payment fee, a little for time.
- Divide the parcel cost by your margin per rupee of sale. That shows the basket value below which you lose money.
The post on contribution margin per order walks through this with a full example.
The other side
A minimum can annoy a buyer who only wanted one small thing. It may push some people away. I cannot tell you how many, and I will not guess. Weigh it against what a loss-making order costs you.
Alternatives to a hard floor:
- Add a small handling fee for tiny baskets.
- Offer bundles so a larger basket feels natural. See bundle price versus separate price.
- Set a free shipping line and let small baskets pay shipping. See setting a free shipping threshold from margin.
What Varchas supports today
I checked the cart, checkout and settings code. Varchas Stores has a free shipping threshold you can set in settings, and product-level minimum quantity rules for bulk products. I did not find a store-wide minimum order value setting. If you want a floor, state it in your product descriptions and policies, and use a free shipping line and bundles to nudge baskets upward.
Be clear and fair
If you do impose a floor, write it where buyers can see it before they fill their bag: on the product page, FAQ and policy page. A surprise at the last step feels like a trick.
The takeaway
A minimum order value protects you from orders that cost more than they earn. Do the parcel-cost arithmetic first, then choose between a floor, a fee, or a shipping threshold.