⚠️ For the best experience, please view this page on desktop.
📘
Prime Numbers
Your client is an investor evaluating the U.S. market for premium e-commerce memberships — programs like Amazon Prime that offer benefits such as fast shipping, streaming content, and exclusive deals. They’re particularly interested in estimating the total annual consumer spend on premium e-commerce subscriptions in the United States. How would you size this market?
Your answer:
Your response will be saved to your account for you to review.
Answer Saved!
Oops! Something went wrong while submitting the form.
Your answer has been saved.
📋 Solution:
Prime Numbers
Step 1: Estimate the U.S. Adult Population
Start with total U.S. population: ~330 million
Assume ~75% are adults → 330M × 75% = ~250 million adults
Step 2: Segment Adults by Online Shopping Behavior
Not all adults shop online or subscribe to premium services. We'll segment:
- Heavy online shoppers (frequent purchases, value convenience) – ~30%
- Moderate online shoppers – ~40%
- Low or non-online shoppers – ~30% → excluded from TAM
→ 250M adults × 70% = ~175 million addressable online shoppers
Step 3: Estimate % Who Have Premium E-Commerce Memberships
- Assume 60% of heavy online shoppers have a premium membership
- Assume 20% of moderate online shoppers do
→ (250M × 30%) × 60% = 45M
→ (250M × 40%) × 20% = 20M
→ Total: ~65 million paying subscribers
Step 4: Estimate Average Annual Spend per Subscriber
Include both single-retailer memberships (e.g. Prime, Walmart+) and multi-retailer bundles
Assume:
- Average annual price per membership = $120
- Some people hold multiple memberships or family bundles
→ Adjust average spend to $150 per person per year
Step 5: Calculate Total Annual Market Size
65 million × $150 = ~$9.75 billion per year
Final Answer
Estimated annual U.S. consumer spend on premium e-commerce subscriptions: ~$10 billion