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Market sizing questions: a method that works every time

A four-step method for market sizing questions, two worked examples, the benchmark numbers worth knowing and the mistakes that cost candidates marks. 5 min readUpdated By the Prepper team

"How many coffee cups are sold in London each day?" Market sizing questions test whether you can turn a vague question into a structured estimate with sensible numbers. The exact answer matters less than the route.

The method

  1. Clarify. What exactly is being counted, where and over what period?
  2. Structure. Write an equation before any numbers. Choose top-down (population to buyers) or bottom-up (outlets and capacity).
  3. Estimate. Fill in each part with round numbers and say your assumptions aloud.
  4. Check. Does the result pass a sanity test? What would change it most?

Example: top-down

Annual market for bicycles in the Netherlands.

  • Population about 18 million.
  • Assume 90% own a bicycle: about 16 million bikes.
  • A bike is replaced every 10 years: 1.6 million a year.
  • Add 20% for second bikes and e-bikes replaced sooner: about 1.9 million.
  • Average price €900, mixing ordinary and electric: roughly €1.7 billion.

Example: bottom-up

Daily revenue of a city-centre coffee bar.

  • Open 10 hours. Two peak hours at 100 customers, eight at 30: 440 customers.
  • Average spend €5.
  • About €2,200 a day.

Numbers worth knowing

  • Populations of your country, the UK, the US, the EU and the world.
  • Average household size, about 2.2 to 2.5 in Western Europe.
  • Life expectancy about 80, which gives roughly 1.25% of people per year of age.
  • Working days per year, about 230 to 250.

What interviewers reward

  • An equation first.
  • Segmenting where it matters: by age, income, urban and rural.
  • Round numbers and visible arithmetic.
  • A sanity check and a view on the most sensitive assumption.

Common mistakes

  • Jumping to numbers without a structure.
  • False precision: 17.83 million instead of 18.
  • Forgetting replacement cycles for durable goods.
  • No sense check at the end.

Practise with the drills in consulting prep and see full cases in case interview examples.

Frequently asked questions

Do I need the right answer in a market sizing question?

No. Interviewers assess your structure, assumptions and arithmetic. Being within a sensible range and able to defend it is enough.

Top-down or bottom-up?

Use top-down when demand follows population, and bottom-up when supply or capacity is easier to estimate. Doing both as a cross-check is a strong finish.

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