B2B eCommerce market size

B2B eCommerce market size

Calculating market size for the B2B sector has its own characteristics and rules. Estimating B2B eCommerce market size is probably even easier than estimating the size of the consumer market, if you know which indicators to use and in which direction to go. In this article, we’ll look at an example that will help you understand how to calculate market size for your business-oriented products or services rather than end consumers.

Step one: market boundaries

Determine the boundaries for calculating market volume. To do this, all you need to do is make a list of the cities in which you do or plan to do business. You can use a list of all the cities in the country, with population for each city, to identify your target cities. Population is usually the easiest criterion by which to assess the scale of a city and the feasibility of working with it.

Step two: work with company database

Calculating the size of the target market is a time consuming process, and this step is the longest and most extensive. Without the help of sales managers who work in the target market, the step will be very difficult to perform. For each city, prepare a separate Excel sheet. On each sheet, ask your sales team to list all the potential customers of your business and assign each company to a specific type and size. 

Step three: estimate market volume

Once all the prep work has been done and all the primary information has been obtained, you can move directly to the calculation. The first thing we did was to transfer the number of companies we got from the sales department into our summary table. Then for each type of company, we established the average value of the frequency of orders of goods / services per year (based on available sales statistics). You can average this data for all cities or set your own averages for each city.

The next step for each type of customer, we determined the average value of the amount of 1 order in dollars. You can average these data for all cities or for each city to set their averages. On the basis of this table we can distinguish: priority cities with the largest market capacity and priority groups of customers in each city.

An additional step in the analysis of market volume can be an assessment of the potential of each customer group, in other words, identifying those customers who can bring our business the maximum amount of sales. For this purpose we determine the amount that can bring us one company in the target city for 1 year of work with it.

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