How do you calculate Market Size
Market Size - more formally, your Total Addressable Market (TAM) - is an important metric to assess how many people you could possibly sell your product to, assuming you corner 100% of your target niche. When combined with your competition assessment, you can determine if it's going to be worth it to attempt to sell to a given target market, or if you need to choose a different strategy.
Market Size Calculation
It's not possible to perfectly assess how big a given market is, so we review a few key metrics to generate an estimate, including:
Government Trade Data, which estimates the volume of imports of given product types
Government Retail Data, which gathers self-reported data about brick-and-mortar and online sales
Online Keyword Search Volume, which acts as a proxy for purchase interest
Review Counts across a variety of product sites
A few other data sources
These are the same kind of metrics you use if you are generating a research report for yourself. We then combine these metrics (depending on what's available and your target niche) to generate a "best approximation" of market size.
Updated on: 10/11/2023