In a satellite gravimetry mission similar to GRACE, the precision of inter-satellite ranging is one of the key factors affecting the quality of gravity field recovery. In this paper, the impact of ranging precision on the accuracy of recovered geopotential coefficients is analyzed. Simulated precise orbit determination (POD) data and inter-satellite range data of formation-flying satellites containing white noise were generated, and geopotential coefficients were recovered from these simulated data sets using the crude acceleration approach. The accuracy of the recovered coefficients was quantitatively compared between data sets encompassing different ranging precisions. From this analysis, a rough prediction of the accuracy of geopotential coefficients could be obtained from the hypothetical mission. For a given POD precision, a ranging measurement precision that matches the POD precision was determined. Since the purpose of adopting inter-satellite ranging in a gravimetry mission is to overcome the imprecision of determining orbits, ranging measurements should be more precise than POD. For that reason, it can be concluded that this critical ranging precision matching the POD precision can serve as the minimum precision requirement for an on-board ranging device. Although the result obtained herein is about a very particular case, this methodology can also be applied in cases where different parameters are used.