GMV is a good metric to track for any eCommerce business or C2C exchange site. When you can make this quick calculation at any point, you can see how things are going overall. If you have a lot of costs and expenses, you need to go deeper to do a real business health check. If free shipping means that customers buy additional items, you still come out on top.

  1. Gross Merchandise Value – the ultimate measure of your sales volume
  2. How to Calculate Gross Merchandise Value
  3. How to calculate GMV
  4. (GMV) Gross Merchandise Value: Meaning & Calculation
  5. Importance of Gross Merchandise Value
  • Gross Merchandise Sales (GMS) is another term used interchangeably with Gross Merchandise Value (GMV).
  • It’s clear you want this number to grow as it means your customers are spending more money with you, again this links back to CAC and increasing your CLV.
  • Since retailers may or may not be producers of the goods they sell, measuring the gross value of all sales provides insight into the company’s performance.

Look at GMV vs. Revenue, so you find the balance between “easy to sell” and “bring in profits.” This way, you can push cyclical products that generate recurring revenue for your store. Another loyalty program that increases GMV and yields excellent results is offering referral rewards. This program leads to new customers being brought in through word-of-mouth marketing and another opportunity to increase your gross merchandise value. As a result, their average order value increases, and, as a result, your total gross merchandise value increases as well. It’s interesting to observe the GMV against the customer acquisition cost in time. You can evaluate whether new customers are really buying enough of your products or whether you need to make the offer more attractive to them.


Gross Merchandise Value – the ultimate measure of your sales volume

Over the 24-hour period on November 11 – or Singles’ Day – Alibaba generated US$25.3 billion in GMV. This dwarfs the online sales in 2016 for Black Friday and Cyber Monday, which garnered less than US$7 billion combined. Combine it with other financial and eCommerce metrics to get a complete picture of your business performance. Knowing what your customers want and need helps you refresh your product assortment, understand your products’ value, and which consumers to target. Fluctuations in the customer count help you understand more about the shopping experience, post-purchase flows, and insights that ultimately lead to better marketing decisions. This, in turn, leads to increased sales and customer retention, so you’ll see a boost in GMV.

Total Payment Volume (TPV) is a similar term to Gross Payment Volume (GPV) with both being used in the context of financial transactions. But they do show multiple important differences, especially within different industry and company preferences, and with that TPV is also different from It is calculated by multiplying the monthly subscription revenue by twelve. Note that in both examples the total revenue and Gross Merchandise Value are the same amount. This is because we are using simple examples where the stores have one product as a source of income.

How to Calculate Gross Merchandise Value

GMV is measured in dollars and used as a key performance indicator to measure the growth of a business in terms of sales. It can also indicate market demand for products and/or services.In the past, many e-commerce companies used GMV as the primary measure of profitability. Today, most companies recognize that using gross merchandise volume by itself or instead of other metrics does not paint a full picture of profitability. Ecommerce companies can use GMV along with other sales and revenue metrics to understand how the business is functioning and growing. Gross Merchandise Value, also referred to as gross merchandise volume, is the total order value of all merchandise sold throughout a given time period.

How to calculate GMV

If you want to increase your GMV, you should definitely consider offering free shipping for orders surpassing a specific monetary value. In terms of patterns, the Gross Merchandise Value also allows you to see trends in your customers’ behavior. Coming from data geeks like ourselves, it’s no surprise we’re advocating for tracking and analyzing all eCommerce KPIs.

(GMV) Gross Merchandise Value: Meaning & Calculation

In June, rang up US$17.6 billion worth of transactions over an 18-day shopping period for its ‘618’ shopping festival. Discover how Natural Language Processing (NLP) revolutionizes survey analysis, delivering deeper insights on customers’ experiences. This is why you must be careful to avoid getting misled by the GMV and combine it with other eComm metrics (such as AoV, CLV, CR, etc.) to get a complete picture of the performance of your organization. With customer acquisition becoming more expensive and ineffective by the minute, your best bet today is to earn more from existing customers.

So, Gross Merchandise Value puts an emphasis on overall transaction volume, while sales measures the revenue through individual sales. Gross Merchandise Value is most often used by e-commerce or online marketplace businesses, but sales can be applied to any business that sells products or services. On the other hand, Gross Merchandise Value in marketing is used as a metric that represents the total value of products or services sold through a marketing channel or platform in the chosen period of time. In this case, Gross Merchandise Value establishes the performance and effectiveness of marketing strategies and campaigns. This is why many companies involved with e-commerce track Net Merchandise Value (NMV).

Importance of Gross Merchandise Value

To calculate GMV simply take the sale price per item charged to the customer and multiply this by the number of items sold. So whilst GMV will be a good metric to look at to determine total sales value and if this is improving, it needs to be used in conjunction with other metrics to give you a true picture of business performance. When you are running an eCommerce website or deal with any kind of retail, it is vital to know what GMV is. Also known as Gross Merchandise Value or Gross Merchandise Volume, this important figure tells you the total value of goods you have sold over a certain period. This is a good metric to keep in mind when working on ways to increase sales and expand your company’s bottom line. Returns and discounts are also not included in the GMV figure, meaning the net income the company ultimately takes away from its total sales is not accurately represented.

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