Published On: Fri, Jan 29th, 2021

Mind a gap: E-commerce marketers should correct their TAM and SAM estimates

2021 is going to be another stately year for e-commerce.

It is that time of a year when many of us are looking behind during a “total addressable market” estimates to devise for specific campaigns. Unlike us, if we had your 2021 flog off in Q3, magnify your soul. You are an cordial being.

For a rest of you, for whom e-commerce is a vital market, we have a doubt — have we built your sum addressable marketplace (TAM) and workable addressable marketplace (SAM) estimates for 2021 deliberation how things developed in 2020?

For many of us, investigate is a mind-numbing, repeated practice of clicking by links on Google until they all spin purple — during that indicate we start seeking a simplest probable explanation. For e-commerce, addressable marketplace estimates come in a form of headlines from platforms like Shopify. The association quotes a businessman count series in a gain calls and that becomes a basement for guesstimating a stream TAM of e-commerce companies.

The other, rather uncomplicated proceed is to demeanour during a user-base count from several databases that tell tech platform-level user stats.

In reality, a simplest answer is not a right answer.

Mind a gap

Let’s take e-commerce selling transport installations. Shopify, Magento, WooCommerce, BigCommerce and others tell designation numbers that run into millions.

Here is a dichotomy that should support your TAM discussions.

E-commerce is long-tail heavy. Yes, there are millions of merchants, though e-commerce income is a fat-tail materialisation — meaning, a jagged volume of e-commerce income comes from a few tens of thousands of companies.

PipeCandy publishes bottom-up TAM estimates with minute information cuts by technology, logistics and remuneration complement adoptions by firms opposite income tiers opposite all vital markets. One of a common misconceptions we see in how firms misrepresent TAM estimates is that they proportion income to spend potential.

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