ARPU (Average Revenue Per User): Formula, Industry Benchmarks, and the Difference from ARPPU

"We're getting more visitors from ads, but I honestly don't know how much revenue each user actually brings in." That's a common state in ecommerce. The metric that answers that question is ARPU — Average Revenue Per User.

ARPU is often associated with SaaS and mobile apps, but it works for ecommerce too — especially when you want to compare "revenue per person" across acquisition channels. This article covers the formula, the difference from ARPPU, industry benchmarks, and how to measure it yourself.

Key Takeaways#

1. ARPU = average revenue per user, using ALL users as the denominator

   Formula: Revenue ÷ Total Users. Non-buyers and free members are included.

2. ARPPU = average revenue per PAYING user only

   Formula: Revenue ÷ Paying Users. Since the denominator is smaller, ARPPU is always higher than ARPU.

3. Use ARPU for channel investment decisions; ARPPU for unit economics

   ARPU captures the CVR effect. ARPPU isolates spending per buyer.

4. ARPU levels vary widely by business type

   High-priced, high-repeat products have the highest ARPU; low-priced one-off items have the lowest.

5. GA4 makes per-user revenue hard to extract

   You need to pull revenue and user counts separately and divide — especially for channel-level comparisons.

1. What Is ARPU: The Formula#

Bottom line: ARPU is "average revenue per user." Divide revenue by total users.

ARPU (Average Revenue Per User) is calculated by dividing a period's revenue by the number of users in that period. The formula is straightforward:

ARPU = Revenue ÷ Total Users

If monthly revenue is ¥3 million and monthly users are 1,000, ARPU is ¥3,000. That means each user generated ¥3,000 in revenue on average.

The key point is that the denominator is all users. Buyers, window shoppers, and free members all count. When ARPU is low, you need to determine whether the issue is "too few buyers (a CVR problem)" or "too little spend per buyer (a unit economics problem)." ARPU is the product of two components [1]:

ARPU = CVR × ARPPU

This decomposition leads directly to the difference between ARPU and ARPPU in the next section.

2. ARPU vs. ARPPU#

Bottom line: the denominator is different. ARPU uses all users; ARPPU uses paying users only.

ARPPU (Average Revenue Per Paying User) narrows the denominator to paying users only.

ARPPU = Revenue ÷ Paying Users

With ¥3M in revenue and 200 paying users, ARPPU is ¥15,000. Compared to the ARPU of ¥3,000 (divided by all 1,000 users), it's 5× higher. That's because CVR is 20% — the ARPU = CVR × ARPPU relationship in action.

Here's how to choose between them:

• Channel investment decisions → ARPU: compare "revenue per person brought in" across channels. It captures CVR differences.
• Unit economics improvement → ARPPU: focus on the average spend per buyer. Better for measuring cross-sell and upsell effects [2].
• Overall growth → both: if ARPU rises, it's either CVR improving, ARPPU improving, or both.

In ecommerce, "average order value" (AOV) and ARPPU are often used interchangeably. But AOV is "per order" while ARPPU is "per person." If one person places 2 orders in a month, AOV and ARPPU diverge. For more on AOV, see How to Calculate and Increase Average Order Value (AOV).

3. ARPU Benchmarks by Business Type#

Bottom line: ARPU levels vary by business type. Judge "high or low" relative to your category.

There's no universal pass/fail threshold for ARPU. A subscription SaaS and a one-off apparel store operate at completely different ARPU scales. What determines the benchmark is product price, repeat frequency, and monetization model.

Four broad patterns emerge:

• High price × high repeat (supplements, cosmetics subscriptions): highest ARPU. Subscription models drive high LTV after conversion.
• High price × low repeat (electronics, furniture): large per-order revenue but infrequent, so monthly ARPU is moderate.
• Low price × high repeat (food, daily necessities): small per-order value but repeat purchases add up. ARPU is moderate to low.
• Low price × low repeat (sundries, accessories): lowest ARPU. CVR improvement is the priority.

Rather than copying an industry average, figure out which quadrant your business occupies and benchmark against similar types [1]. To raise ARPU, there are only two levers: raise CVR or raise ARPPU. For CVR improvement, see 30-Point CVR Improvement Checklist for Ecommerce.

4. Why ARPU Is Hard to See in GA4#

Bottom line: GA4 is session-centric, so extracting "revenue per user" requires extra work.

Calculating ARPU requires both "revenue in the period" and "user count in the period." GA4 is designed around sessions, so ecommerce purchase amounts are available. But to see "how many users came, how many bought, and how much per user" by channel, you need to configure exploration reports in detail. Switching between "ARPU (all users)" and "ARPPU (paying users only)" adds further filter overhead.

RevenueScope takes revenue as the starting point and lines up RPS (Revenue Per Session) and AOV by channel. RPS is close to a "session-level ARPU" — it shows how much revenue each visit generates per channel. The ARPU decomposition of "is it a CVR problem or a unit economics problem" becomes easier to isolate from actual revenue data.

5. FAQ#

Q. What's the difference between ARPU and RPS (Revenue Per Session)?

The denominator unit differs. ARPU divides by users (people); RPS divides by sessions (visits). If one person visits 3 times in a month, that's 3 sessions but 1 user. RPS measures visit quality; ARPU measures customer quality. For more on RPS, see What Is RPS: Revenue Per Session Formula and Usage.

Q. ARPU drops when there are many free users. Is that a problem?

It depends on whether the cause is "too many non-buyers (low CVR)" or "low spend per buyer (low ARPPU)." Decompose with ARPU = CVR × ARPPU to identify the bottleneck.

6. 3 Steps to Measure Your ARPU#

Bottom line: measure ARPU in three steps — check revenue, divide by users, then decompose.

Step 1: Check the period's revenue

Start with the last month's revenue. Pull it from GA4's ecommerce report or your cart platform's dashboard. If you can break it out by channel, do so — differences will appear in the next step.

Step 2: Divide by user count

Divide revenue by user count to get ARPU. In GA4, use the "Active users" metric. Also divide by paying user count to get ARPPU alongside it — the CVR effect becomes visible.

Step 3: Decompose with ARPU = CVR × ARPPU

Identify whether the bottleneck is low CVR or low ARPPU. RevenueScope lets you compare RPS and AOV by channel, making it straightforward to judge which channels convert revenue effectively from actual sales data.

Summary#

ARPU is "revenue per user" with all users as the denominator. ARPPU is the same but for paying users only. The difference is just the denominator, but what you see changes. Use ARPU for channel investment decisions and ARPPU for unit economics improvement. Decompose with ARPU = CVR × ARPPU to find where to focus. Start by calculating last month's ARPU and ARPPU.

Related Articles#

• How to Calculate LTV: 5 Methods and 3 Steps to Measure It Yourself
• What Is CAC: Formula, Industry Benchmarks, and the LTV Relationship
• What Is RPS: Revenue Per Session Formula and Usage
• How to Calculate and Increase Average Order Value (AOV)
• 30-Point CVR Improvement Checklist for Ecommerce

References#

• Ministry of Economy, Trade and Industry (Japan) "FY2024 E-Commerce Market Survey" August 2025 [1]
• Shopify "Customer Lifetime Value (CLV): What It Is and How to Calculate" December 2024 [2]
• HubSpot "Customer Lifetime Value (CLV): How to Calculate & Improve It" August 2024
• Google "Measure ecommerce — GA4" 2024