What is Repeat Purchase Rate?
Repeat purchase rate measures the percentage of customers who come back to buy again. It's a critical indicator of customer satisfaction and product-market fit in ecommerce and consumer businesses.
High repeat rates mean customers love your product enough to return. Low repeat rates suggest the first purchase didn't meet expectations, or you're not giving them reasons to come back.
Why Repeat Purchase Rate Matters
Repeat customers are more profitable. They cost less to acquire (they're already customers), spend more per order, and refer others. Building a base of repeat customers creates sustainable growth.
Repeat rate also validates your product and experience. If customers don't return, something is wrong with the product, price, or post-purchase experience.
Improving Repeat Purchase Rate
Email marketing and remarketing to past buyers. Subscription or auto-replenishment options. Loyalty programs and rewards. Excellent post-purchase experience. Product quality that exceeds expectations.
How to Calculate Repeat Purchase Rate Step by Step
Step 1: Define your time window. How long do you give customers to make a second purchase? This depends on your product. Consumables might use 90 days, durable goods might use 12 months.
Step 2: Count total unique customers and repeat customers in the period.
- Unique customers (trailing 12 months): 4,200
- Customers who made 2+ purchases: 1,260
Step 3: Divide. Repeat Purchase Rate = 1,260 ÷ 4,200 = 30%
30% of customers bought again within 12 months. For ecommerce, 25-40% is typical depending on category.
Step 4: Break down by purchase frequency.
- 1 purchase: 2,940 (70%)
- 2 purchases: 756 (18%)
- 3+ purchases: 504 (12%)
Your power buyers (3+) are 12% of customers. Identify what they have in common and find more like them.
Step 5: Calculate time between purchases. Average days between first and second purchase = your re-engagement window. If the median is 45 days, trigger your retention email sequence at day 30.
Common mistakes founders make:
- Using too short a time window (not giving customers enough time to repurchase)
- Not segmenting by product category (consumables vs one-time purchases have very different norms)
- Ignoring the gap between first and second purchase (the second purchase is the hardest to earn)
- Not connecting repeat purchase rate to LTV projections
Formula
Repeat Purchase Rate = (Customers with 2+ Orders) ÷ (Total Customers) × 100
For cohorts: (Cohort Members Who Repurchased) ÷ (Total Cohort Members)
Example
Cohort analysis:
- Customers who purchased in Q1: 1,000
- Of those, purchased again within 12 months: 350
Repeat Purchase Rate = 350 ÷ 1,000 = 35%
35% of first-time buyers become repeat customers. Focus on understanding what drives that 35% to convert more of the 65%.