Gorgias Addressable Market on Shopify
To find the total addressable market for Gorgias on Shopify in order to know what revenue Gorgias would have if all Shopify brands were using their product.
- According to Shopify's financial results for the year 2018, Shopify "currently powers over 800,000 businesses in approximately 175 countries".
- Shopify is used in about 175 countries.
- At the end of 2018, Shopify had a total revenue of $1.073 billion.
- As at June 2019, Shopify was quoted to have 820,000 merchants available on its platform. This tallies with the figures presented in their 2018 financial report.
- To calculate the Total Addressable Market, we will multiply the total number of accounts in that specific industry/platform by the Annual Contract Value (ACV) of a company's service or product.
- We shall use the merchant numbers to calculate a hypothetical Total Addressable Market (TAM) figure for Gorgias.
- We shall also use the Average Annual Revenue (AAR) figure per customer given by the client in our analysis.
- With Gorgias' AAR per customer of $2,200 and a total merchant base of 820,000 on Shopify, if Gorgias was servicing all merchants on Shopify, they would have a revenue of $2,200 x 820,000 merchants. This would be $1.804 billion (one billion, eight hundred four million dollars).
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