Gross Merchandise Value (GMV): Definition, Calculation, and Analysis

What is GMV?

Gross Merchandise Value (GMV), also called gross merchandise volume, is the total dollar value of goods sold through an online marketplace or e-commerce platform over a given period. It measures the scale of transactions facilitated by a platform but does not account for fees, returns, discounts, or other deductions. GMV is commonly used to assess growth and sales activity—especially for customer-to-customer (C2C) marketplaces and multi‑seller platforms.

Key takeaways

• GMV = total sales value of goods sold on a platform before deductions.
• It indicates transaction scale and growth trends but not company profitability.
• To understand a company’s true revenue, combine GMV with metrics like take rate, net revenue, and active buyers.
• Adjust GMV for returns, refunds, and discounts for a more accurate picture.

How to calculate GMV

GMV is calculated before fees or expenses are removed:

GMV = Sales price of goods × Number of goods sold

Notes:
* Exclude returned or refunded sales (or subtract them) to avoid overstating GMV.
* GMV does not subtract seller payouts, commissions, shipping, advertising, or other operating costs.

Pros and cons

Pros
* Simple to compute and easy to track over time.
Useful for comparing marketplace activity across periods or against competitors.
Reflects gross demand and sales volume regardless of whether the platform owns inventory.

Cons
* Not a measure of profitability—most of GMV typically accrues to sellers, not the platform.
Ignores costs, fees, returns, and customer behavior (repeat purchases, conversion rates).
Can be misleading if used alone to value a business.

How C2C and marketplace retailers use GMV

C2C marketplaces (e.g., eBay, Etsy) act as intermediaries that list seller inventory and facilitate transactions, usually taking a fee or commission. These platforms report GMV to show overall transaction volume even though their actual revenue equals the fees they retain—not the full GMV. GMV is especially relevant where the platform does not own the merchandise (consignment, third‑party sellers).

Example industry scale: some large marketplaces report annual GMV in the hundreds of billions, reflecting the platform’s transaction volume rather than its retained revenue.

GMV vs. GTV

GMV (Gross Merchandise Value) measures the total value of goods sold. GTV (Gross Transaction Value) is a related term sometimes used to describe the total value of transactions processed through a platform. In practice:
* GMV is focused on merchandise sold.
* GTV can be broader—used by some businesses to describe total transaction volume including services or fee‑inclusive measures.
Usage varies by company and industry, so check specific definitions in financial disclosures.

Example

Two marketplaces in one quarter:
* Site A sells 100 items at $5 each → GMV = 100 × $5 = $500.
* Site B sells 80 items at $4 each → GMV = 80 × $4 = $320.

If Site A charges a 2% fee and Site B charges 4%:
* Site A revenue from fees = $500 × 2% = $10.
* Site B revenue from fees = $320 × 4% = $12.80.

Although Site A has higher GMV, Site B earns more fee revenue—illustrating why GMV alone doesn’t reflect platform earnings.

Best practices for using GMV

• Compare GMV across consistent time intervals (QoQ, YoY).
• Adjust for returns, refunds, and discounts when possible.
• Pair GMV with take rate (fee percentage), net revenue, active buyers, and repeat-purchase metrics for a fuller view of performance.
• Be cautious using GMV for profitability or valuation without complementary financial metrics.

Frequently asked questions

What does GMV mean?
* The total value of goods sold through a platform during a set period, before deductions.

Is GMV the same as revenue?
* Not usually. GMV is gross transaction value; a platform’s revenue is typically the fees it retains (take rate × GMV) plus any other income.

How is GMV used by startups?
* Startups use GMV to demonstrate marketplace traction and sales scale, often alongside metrics that show monetization and customer retention.

Bottom line

GMV is a useful indicator of marketplace scale and demand but is not a substitute for revenue or profitability metrics. Use GMV to track growth and compare activity, and always complement it with take rate, net revenue, active-user, and retention metrics to evaluate a platform’s financial health.