What is GMV and How Does it Work?

If you're running or analyzing an e-commerce business, you've probably come across the term GMV or Gross Merchandise Value. 

But what exactly does it mean? 

And how is it different from your actual revenue?

In this guide, we’ll break down what GMV really stands for, how it’s calculated, and why it plays a crucial role to understand your business’s growth, especially in marketplaces and online stores.

What is GMV?

GMV (Gross Merchandise Value) refers to the total value of all goods sold over a specific time period through an online store or marketplace. It’s a top-level metric that helps measure sales volume, not profit.

Think of GMV as the total amount your customers spend before any deductions like shipping, discounts, or platform fees.

How is GMV calculated?

Here’s the basic formula:

GMV = Total Sales Price × Number of Units Sold

Example:

• You sell 50 T-shirts for $20 each.
• GMV = 50 × $20 = $1,000

Note: If you offered discounts or incurred fees, those are not subtracted in this calculation.

Why does GMV matter?

1. Tracks business growth

GMV offers a high-level view of your store’s performance. It shows how much value is being transacted, even if your margins are low.

2. Popular with investors

Marketplaces like Amazon, Flipkart, and Etsy often highlight GMV to show their transaction volume. High GMV = high market activity.

3. Good benchmark for multi-seller platforms

If you run a marketplace like Shopify or WooCommerce multi-vendor stores, GMV shows how active and valuable the platform is overall.

GMV vs revenue: What’s the difference?

GMV can often be much higher than revenue, especially if you operate on thin margins or offer large discounts.

Where is GMV most relevant?

➤ Marketplaces like Amazon & eBay

These platforms rely on GMV to show investor potential and user engagement.

➤ E-commerce Aggregators

Companies that roll up multiple Shopify stores track GMV to evaluate store performance.

➤ Retail Brands Measuring Campaign Impact

Want to see the total sales influenced by a marketing campaign? GMV gives a clear snapshot.

Limitations of GMV

While GMV is a great top-level metric, it doesn’t tell the full story.

• It ignores returns: Returned items still count in GMV.
• It excludes profit margins: High GMV doesn’t mean your business is profitable.
• It can be inflated by big-ticket items or one-time bulk orders.

So, while GMV gives a sense of activity, don’t rely on it alone for financial decisions.

GMV tracking tools & platforms

If you're looking to track GMV, here are a few tools that help:

• Shopify Analytics– Built-in dashboard shows gross sales (similar to GMV).
• Google Analytics 4– Set up e-commerce tracking to monitor GMV-like metrics.
• BigCommerce & WooCommerce– Offer GMV insights through plugins and reports.
• ERP and BI Tools– Use tools like Zoho, Tableau, or Power BI for custom GMV dashboards.

GMV statistics in 2025 (Quick glance)

Let’s take a quick glance at what the data has to say:

1. The global e-commerce GMV in 2025 is projected to cross $7.3 trillion.
2. Some marketplaces account for 62 %+ of all GMV online.
3. The average GMV per Shopify store has increased 14% YoY in 2025.
4. Amazon alone reported over $700 billion GMV in the past year.

FAQs

Sources

1. invespcro.com. Global Online Retail Statistics and Trends
2. Channelengine.com. Top 20 ecommerce marketplaces in the world