Gross merchandise value (GMV)

What is GMV (gross merchandise value)?

GMV, or Gross Merchandise Value, refers to the total value of merchandise sold through a marketplace or ecommerce platform over a specific period—before deducting any costs like shipping, returns, or discounts. It’s a key metric for understanding sales volume and overall business growth.

Why is GMV important in ecommerce?

GMV helps ecommerce businesses, especially marketplaces, track performance and measure the total dollar value of products sold. While it doesn’t represent actual revenue, it gives a high-level view of transaction volume, which is useful for growth tracking, investor reporting, and benchmarking.

How is GMV calculated?

The basic GMV formula is:

GMV = Price of Goods × Number of Items Sold

It excludes costs like shipping, taxes, discounts, and returns, which makes it different from net sales or revenue.

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

• GMV: Total value of all sales before deductions.
• Net Sales: Revenue after deducting discounts, returns, and allowances.
• Revenue: The income a business actually earns, often based on commissions or the final amount received post-transaction.

Example: Understanding GMV in context

If you sell 100 t-shirts at $25 each, your GMV is $2,500, regardless of returns or discounts.

Driftcharge Tip

Use GMV alongside metrics like net revenue and AOV to get a full picture of business performance, especially if you operate a marketplace or high-volume store.

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.