Gross merchandise value (GMV)

What is GMV (gross merchandise value)?

GMV, or Gross Merchandise Value (sometimes called Gross Merchandise Volume), is the total dollar value of goods sold through an ecommerce store or marketplace over a specific period, before deductions like discounts, returns, refunds, and platform fees. It’s a top-line measure of transaction volume reported monthly, quarterly, or annually. GMV is not the same as actual revenue earned.

Note that practice varies on whether GMV includes taxes and shipping. Most DTC brands report it as the gross order subtotal, while marketplaces often include the full transaction value. Pick one definition and apply it consistently across reporting periods.

Why is GMV important in ecommerce?

GMV is the headline scale metric for ecommerce stores and marketplaces. It’s commonly used to:

• Track growth trends month over month or year over year
• Report performance to investors and benchmark against competitors
• Spot seasonal patterns and demand shifts
• Size the platform’s total economic activity, not just its earnings

For subscription businesses, GMV includes the value of every billing cycle from active subscribers, so recurring revenue flows directly into GMV alongside one-time orders. Because GMV says nothing about profitability or sustainability, it’s almost always read alongside net revenue, AOV, and gross margin.

How is GMV calculated?

The basic GMV formula is:

GMV = Price of Goods × Number of Items Sold

A more practical version for most ecommerce stores is:

GMV = Number of Transactions × Average Order Value (AOV)

Both produce the same result. GMV is calculated before subtracting discounts, returns, refunds, fees, or COGS. Some merchants also report Net Merchandise Value (NMV), which is GMV minus returns and cancellations, for a cleaner view of completed sales.

GMV vs. net sales vs. revenue — What’s the difference?

These three metrics overlap but measure different things:

• GMV: Total value of all sales before any deductions.
• Net sales: Revenue after subtracting discounts, returns, allowances, and (for marketplaces) third-party seller payouts.
• Revenue: What the business actually earns and recognizes. For DTC brands selling their own inventory, revenue tracks closely with GMV. For marketplaces, revenue is typically a percentage of GMV called the take rate, the platform’s fee on each transaction.

A marketplace and a DTC brand can post identical GMV numbers and have very different revenue, because the marketplace only keeps its fee while the DTC brand keeps the full sale.

Example: Understanding GMV in context

If you sell 100 t-shirts at $25 each, your GMV is $2,500, regardless of returns or discounts applied later. If those same sales happened on a marketplace charging a 15% take rate, the marketplace’s revenue from that activity is $375, while the seller keeps $2,125. GMV is identical in both cases; revenue is not.

Driftcharge Tip

For Shopify and subscription brands, read GMV alongside net revenue, AOV, churn rate, and monthly recurring revenue (MRR). MRR is the subset of GMV generated by active subscriptions, so tracking the two together tells you whether your scale is being driven by sustainable recurring transactions or one-time spikes.

Ganesh Pawar

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Ganesh Pawar is the founder of Driftcharge, a subscription management app designed to help Shopify merchants streamline and scale their subscription businesses. With a deep focus on solving real-world pain points—like legacy account page support, flexible subscription options, and advanced analytics—Ganesh is passionate about building tools that drive growth and retention.