Gross merchandise value (GMV) is the sum of transaction values flowing through a commerce or services platform— the standard scale metric for marketplaces before platform fees.

How it works

Marketplaces report GMV as total order value across sellers or service providers in a month, quarter, or year. Definitions should exclude canceled orders if stated, or include gross bookings before refunds—consistency matters quarter to quarter. Platform revenue is GMV multiplied by take rate plus ancillary fees (ads, fulfillment). GMV growth indicates buyer and seller activity; take rate stability shows pricing power. Comparing GMV across companies requires matching definitions—some include shipping, taxes, or tips; others do not. GMV is not recognized under GAAP as company revenue for pure marketplaces acting as agents.

Why it matters

• Founders: Present GMV alongside net revenue, contribution margin, and repeat purchase rates in investor updates.
• Investors: Use GMV for early traction comparisons; shift focus to unit economics and retention as the business matures.

Common mistake

Using GMV in revenue multiples—valuing a marketplace on GMV like SaaS ARR inflates perceived scale.

Related ideas

GMV, take rate, gross merchandise volume, and net merchandise value.