what is gross merchandise value gmv 
gross merchandise value gmv is the total value of merchandise that s sold over a given period through a customer to customer c2c exchange site it s a measurement of the growth of the business or the use of the site to sell merchandise owned by others gross merchandise value gmv is often used to determine the health of an e commerce site s business because its revenue will be a function of gross merchandise sold and fees charged it s most useful as a comparative measure over time such as current quarter value versus previous quarter value gmv is also known as gross merchandise volume both phrases indicate the total monetary value of total sales understanding gross merchandise value gmv gross merchandise value gmv is calculated before the deduction of any fees or expenses it provides information that a retail business can use to measure growth often on a month over month quarter over quarter or year over year basis a retail business can generally calculate the gross value of all completed sales but merchandise returns may have to be removed from this number to provide an accurate calculation 1simply multiply the number of goods sold by the sales price of the goods to calculate gmv the formula is gmv sales price of goods x number of goods sold accrued fees and expenses may include advertising delivery returns and discounts advantages and disadvantages of gmvgmv has its advantages and drawbacks just like most other growth measurements retailers may or may not be the producers of the goods they sell so measuring the gross value of all sales provides insight into the company s performance this is especially true in the customer to customer market where the retailer serves as a third party mechanism for connecting buyers and sellers without actually participating in the transaction gmv may also provide value to retailers in the consignment sector because they never officially purchase their inventory the items are often housed within a company s retail location but the business functions solely as the authorized reseller of another person s or entity s merchandise or property often for a fee they re generally not the true owner of the items because the person or entity that placed the item on consignment may return and claim the item if they choose to do so gmv represents the total value of goods sold on a c2c exchange but it doesn t truly reflect the profitability of a company it primarily shows the true revenue that a company earns from fees the entire 500 doesn t go to the company if its gmv was 500 for the month the majority will go to the individual who sold the goods the company s true revenue would be the fee it charges for the use of its site the company s true revenue would then be 500 x 2 10 if the fee was 2 gmv can have other disadvantages depending on the type of e commerce site gmv would indicate its revenues but it would only be one metric providing a limited view if a company were an online retailer that produced and sold its own goods it wouldn t tell you how many customers visited the site or how much revenue was received from repeat customers both are important indicators in terms of customer satisfaction and the long term health of the company provides insight into a company s performanceallows for comparison with competitorssimple and quick calculation to performnot a true reflection of a company s actual revenuea limited metric that doesn t consider other factors such as repeat customerscustomer to customer retailerscustomer to customer c2c retailers provide a framework or system for sellers to list items they have in inventory and for buyers to find items of interest the retailer functions as an intermediary facilitating the transaction commonly for a fee without actually being a buyer or seller at any point in the transaction the retailer facilitating the transaction never comes in contact with any of the physical merchandise in many of these customer to customer sales the seller will send the item directly to the buyer when the financial portion of the sale is complete the estimated gross merchandise value gmv of amazon amzn was more than 700 billion in 2023 2this model can differ drastically from other retail models in which the retailer purchases merchandise from producers manufacturers or distributors and then essentially functions as an authorized reseller of goods the company has purchased gross merchandise value gmv vs gross transaction value gtv gmv can be defined as the total dollar value of everything sold through a marketplace in a given period but gross transaction value gtv is a calculation of the revenue relative to commissions gtv is used more in businesses that operate on commissions because it s equal to the number of items sold multiplied by the price collected 3gtv is calculated by multiplying the number of transactions by the average order value by the total number of transactions made and the items sold it tends to be used by e commerce companies in marketplaces where multiple sellers transact example of gmvtwo of the most well known c2c sites are ebay and etsy assume that ebay sold 100 goods during the first quarter of the fiscal year all those goods were priced at 5 ebay s gmv would be 100 x 5 500 for the first quarter now let s say that etsy sold 80 goods in that same quarter and all the goods were priced at 4 etsy s gmv would be 80 x 4 320 for the first quarter ebay ebay has a better gmv at 500 than etsy etsy does at 320 but this doesn t tell the whole story a portion of the revenue on these sites has to go back to the seller that sold the goods ebay and etsy only keep the fees they charge this is their actual revenue ebay charges a fee of 2 so it would bring in 10 500 x 2 etsy charges a higher fee of 4 etsy would bring in 12 80 320 x 4 etsy performed better because it brought in higher take home revenues 