Serviceable addressable market (SAM)

The portion of a total market that a company's product and business model can realistically serve.

Example

12,000 compatible clinics each paying 3,000 a year give a 36,000,000 SAM.

Important

It is usually far smaller than the headline total market.

Related terms

  • Total Addressable Market (TAM) — The total revenue available if a product captured all potential customers in a defined market.
  • Bottom-Up Market Sizing — Estimating a market by counting specific potential customers and multiplying by a realistic price, rather than starting from an industry total.

Lessons that explain it

  • A market is the customers you can name, times what they will pay — Commercial diligence tests market claims by building them from countable customers and realistic prices, then checking the parts the company can actually reach. (10 min)

All 578 terms in the Investing glossary