How much additional revenue do repeat ecommerce customers contribute? 10%? 20% 40%?

I want to take some time now to do what I call Value Math. Don't worry, yes there are numbers but I'll walk you through each one.

Not very many stores do this and I think the results will be eye-opening for you.

Average Order Values for ecommerce

According to Statista, the average order value for ecommerce stores on the first purchase is $76.10.

The second purchase is about 3% higher, so $78.39.

But then there's the third and any other purchases, clocking in at 15% higher: $87.52.

(If you know your average order value, please fill in yours)

Pretty nice order sizes right?

Reorder rates

According to Shopify the average reorder rate for ecommerce stores that help to facilitate reorders is 27%. So about 1 in 4 people will buy from you again.

Example store getting 100 first-time orders per month

For a small shop that gets 100 first-time orders/month, that means they have a gross revenue of $7,610 from first-orders.

But they also get 27 reorders too. If these are the lower-value second orders that's an extra $2,116.53 in gross revenue.

And what about third orders? If 27% of those customers who placed second orders bought a third time, that's another $700.16 in additional gross revenue.

Then another 2 orders for the fourth purchase.

• 1st orders: $7,610.00 (on 100 orders)
• 2nd orders: $2,116.53 (on 27 orders)
• 3rd orders: $ 700.16 (on 8 orders)
• 4th orders: $ 175.04 (on 2 orders)

So for this hypothetical company that only get the industry standard rates of reorders and only sells 100 new orders per month...

Total revenue for all orders is 40% more

They are making $7,610.00 per month on first-time orders and $2,991.73 on repeat orders.

That's an extra 40% revenue just from 37 reorders.

(Don't even get me started on how easy those 37 orders will be to fulfill when compared to the other 100)

What if they optimized their retention process?

What about if you've optimized your retention process and get 37% reorders instead of 27%? You'd make $5,438.51 a month from reorders, $2,446 more than the industry standard rate. (And a cool $150k per year)

This is the power of repeat customers.

This is why you need to have a process to nurture and retain them.

Otherwise you could be losing out on that 40% revenue boost.