Separate customers from transactions. Estimate the number of potential customers first, then multiply by adoption and purchase frequency.

The main risk is mixing annual users, purchases, and units. Each multiplier should have a clear unit so the final number is interpretable.

A clean formula is customers x penetration x purchases per customer per year x average units or value per purchase.

Do a unit check at the end. If your final unit is annual transactions or revenue, every input should reconcile to that. For a related reference, see Market Sizing.

This is a good question. I would also pay attention to what the interviewer is reacting to, because that usually tells you whether the issue is clarity or the underlying logic.