cost per order (CPO)

Mathematical calculation of the costs incurred in selling an item divided by the number of orders received. It is used to examine the relative profitability of various promotions. The CPO ratio can be used to evaluate a single expense item, such as advertising, if all other expense items are excluded from the calculation. If the CPO exceeds the average sales value of each order, the promotion was not profitable. See also cost per inquiry; cost per subscription; cost per thousand.