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What is gross merchandise volume (GMV)?


Mike Taylor
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Gross merchandise volume is used to measure the performance of online marketplaces like Amazon. It equals the total value of all the merchandise sold.

For example, GMV of Amazon in 2016 was $149 billion. It can be compared to the sales of traditional retailers like Walmart - their revenue in the U.S. was $308 billion (this does not include sales that Walmart conducts for third-party sellers online).

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Gross merchandise volume (or GMV) is a value, which is used by e-commerce businesses to measure website performance. GMV is the amount of all items that are sold through the online marketplace.

 

How is GMV calculated?

GMV = sale price * quantity of items sold

For example, if an online marketplace sold 1000 pieces of headphones at a price of $5, the GMV of that website is equal to $5000.

Like gross revenue, GMV does not include discounts, taxes, delivery fees, item returns, additional costs, etc.

GMV usually helps to evaluate an online marketplace and company who own the website, but it is not the only key measure.

World e-commerce marketplace giants like Amazon, eBay, and Alibaba have a high GMV.

 

What is the difference between gross merchandise volume and gross revenue?

GMV is very similar to gross revenue which uses the classical retail model. But it differs, however, in that it works with the online customer to customer (C2C) model only. This means that the online marketplace owner does not sell the items personally, does not have that inventory, and does not deliver the items to customers. Instead, the marketplace owner serves solely as an independent mediator which connects sellers and buyers without actually participating as either.
 

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