Gross Merchandise Value (GMV): All You Need To Know

"Without continual growth and progress, such words as improvement, achievement and success have no meaning." — Benjamin Franklin.

As an ecommerce manager, growth should always be top of your mind, especially with recent reports showing that global ecommerce sales are projected to reach nearly $8 trillion by 2026 (Emarketer). This entails knowing whether demand is rising, how much product is moving through your business, and whether your efforts are actually scaling sales. That’s where Gross Merchandise Value (GMV) comes in.

GMV stands out as one of the most critical financial metrics for online retailers. Reason? This is because it is a direct indicator of your store’s growth, giving you a clear view of sales volume and overall activity. While gross merchandise volume doesn’t tell the full profitability story on its own, it plays a key role in understanding momentum, market demand, and business growth.

In this guide, you’ll learn what Gross Merchandise Value really means, how it’s calculated, why it matters for e-commerce companies and online marketplaces, and how to interpret it alongside other financial metrics so you don’t overestimate performance.

You’ll also see how improving the shopping experience through clearer product discovery and real-time support with tools like Zipchat can help translate buyer intent into completed purchases that support sustainable GMV growth.

Key Takeaways

• Gross Merchandise Value (GMV) measures the total value of goods sold over a period, before deductions.
• GMV is a strong indicator of sales volume and demand, especially for e-commerce businesses.
• It does not account for refunds, discounts, fees, or costs, and it excludes taxes.
• GMV is best used to track growth trends and compare performance across time periods.
• To get a full picture of the company's financial health, GMV should be analyzed alongside revenue, profit, and other ecommerce metrics.

What Is Gross Merchandise Value (GMV)?

Gross Merchandise Value (GMV) is the total monetary sales value of all products sold through an ecommerce store or marketplace during a specific period. It is calculated before deductions such as refunds, discounts, platform fees, or operating costs, and it does not include taxes.

In simple terms, GMV shows how much merchandise customers purchased, not how much money the business actually keeps.

Why Does GMV Matter in eCommerce?

GMV matters because it acts as a top-line growth indicator for ecommerce businesses. It helps founders, growth managers, and analytics teams understand how much product is moving through their store or platform, regardless of margins or fees.

For ecommerce marketplaces in particular, GMV is critical. Since the e-commerce platform often earns revenue through commissions or take rates, GMV reflects overall marketplace activity and demand, even if the platform only keeps a fraction of that value as revenue.

GMV also makes it easier to:

• Track growth over time: Comparing GMV month-over-month or year-over-year highlights demand trends and seasonal patterns.
• Compare performance across channels or regions: Teams can evaluate which products, categories, or markets are driving the most sales volume.
• Assess scale and traction: Investors and operators often use GMV to gauge how quickly an ecommerce business or marketplace is expanding.

That said, GMV works best when paired with contextual growth metrics like revenue and profit. On its own, it shows scale, but not sustainability.

How To Measure Gross Merchandise Value?

Gross Merchandise Value is measured by adding up the total value of all completed sales over a given period, before any deductions are applied. This includes every item sold through your store or marketplace, regardless of whether discounts, refunds, or fees apply later.

At its core, GMV answers one question: How much merchandise did customers buy?

GMV Formula

Gross Merchandise Value = Total number of units sold × Price per unit

Simple Ecommerce Example

Imagine your online store sells 500 products in one month. Each product costs $40.

• 500 units × $40 = $20,000 GMV

Even if you later issue refunds, apply discounts, or pay platform and payment processing fees, your GMV for that month remains $20,000. Those deductions affect revenue and profit, not GMV.

Gross Merchandise Value vs Other Ecommerce Metrics

GMV is often confused with other ecommerce metrics because they’re closely related. This section breaks down how GMV compares to commonly tracked metrics so you can understand what it shows and what it doesn’t.

Difference Between GMV and Revenue

GMV represents the total value of goods sold, while net revenue is the amount your business actually earns after deductions like discounts, refunds, and platform fees.

Example:
If your marketplace records $100,000 in GMV but takes a 10% commission, your revenue is $10,000, not $100,000. GMV shows scale and demand; gross revenue shows what flows into the business.

Difference Between GMV and Profit

Profit goes a step further than revenue. It accounts for all business expenses, including marketing, fulfillment, salaries, software, and overhead.

A business can report high GMV and still operate at a loss if costs are high. That’s why GMV is best viewed as a volume metric and not as a measure of financial health.

Difference Between GMV and NMV

Net Merchandise Value (NMV) adjusts GMV by subtracting refunds, cancellations, and sometimes discounts. NMV offers a more realistic view of completed, retained sales.

While GMV highlights total demand, NMV reflects how much value actually sticks after post-purchase changes.

Difference Between GMV and AOV

GMV measures total sales volume, while Average Order Value (AOV) measures the average amount spent per order. Average Order Value focuses on transaction size, not scale. You can increase GMV by growing order volume, increasing AOV, or both.

When GMV Is Useful and When It Can Be Misleading

GMV is a powerful metric, but only when used in the right context.

GMV is useful when:

• Tracking growth trends over time
• Comparing performance across products, categories, or regions
• Measuring demand in marketplaces or high-volume stores
• Evaluating top-line scale for fundraising or expansion

GMV can be misleading when:

• Refunds and returns are unusually high
• Heavy discounts inflate sales volume
• Customer acquisition costs outweigh retained value
• GMV is viewed without a revenue or profit context

The takeaway: GMV should never stand alone. It works best alongside revenue, NMV, AOV, and profit metrics.

Tips To Increase Your Gross Merchandise Value

Increasing GMV usually comes down to helping customers buy more, more often, with less friction. Here are proven ways to support that growth.

Provide Chat-First Support

Chat-first support uses AI-powered chatbots to help shoppers get answers in real time, reducing hesitation during the buying journey. Whether it’s product questions, sizing help, or shipping clarity, timely conversations can prevent drop-offs and support completed purchases.

Leverage Upselling and Cross-Selling

Suggesting complementary or higher-value products encourages customers to add more items to their cart. Smart upsells and cross-sells increase total basket size, directly contributing to higher GMV.

Offer Product Bundles

Bundling related products into discounted packages increases perceived value and encourages multi-item purchases. Bundles often outperform single-item listings when positioned clearly.

Give Exclusive Rewards

Loyalty programs, limited-time offers, and member-only discounts encourage repeat purchases. Returning customers tend to buy more frequently, lifting overall GMV over time.

Reach Out Proactively

Recovering abandoned carts and nudging hesitant shoppers can reclaim sales that would otherwise be lost. Proactive outreach keeps potential revenue from slipping through the cracks.

Deliver a Dynamite CX

A smooth, intuitive shopping experience reduces friction at every step. This provides users with an improved customer experience from browsing to checkout.

Providing your customers with faster pages, clearer navigation, and responsive support all contribute to higher completed purchases and stronger GMV.

Support Higher GMV With Chat-First Experiences

Gross Merchandise Value shows how much product value flows through your store, but it doesn’t tell the full story on its own. GMV tracks sales volume, not revenue or profit, which is why it’s most powerful when viewed alongside metrics like revenue, NMV, AOV, and conversions.

As we’ve covered, GMV grows when shoppers buy more items, place larger orders, and complete purchases without friction. That’s where chat-first experiences make a real difference. Real-time conversations help shoppers find the right products faster, clear up doubts, and move confidently toward checkout. The result isn’t forced spending, but smoother decision-making and fewer abandoned sessions.

Zipchat enables this chat-first approach by helping ecommerce teams support shoppers at key moments in the buying journey. By improving discovery, answering questions instantly, and reducing friction, chat-first experiences can support higher GMV as a natural outcome of a better shopping experience.

Ready to support higher GMV with chat-first experiences? Start your free trial today and see how Zipchat helps shoppers buy with confidence.

FAQ

1. How do you calculate Gross Merchandise Value?

Gross Merchandise Value is calculated by multiplying the total number of units sold by their sale price over a specific period. It reflects total sales volume before deductions such as refunds, discounts, fees, or commissions are applied.

2. What is an example of a Gross Merchandise Value?

If an online store sells 1,000 products at $30 each in a month, the GMV is $30,000. This figure represents total merchandise sold, even if some orders are later refunded or discounted.

3. Does GMV include refunds?

GMV does not account for refunds. It measures the true value of goods sold before any returns, cancellations, or post-purchase adjustments. Metrics like revenue or Net Merchandise Value are better for understanding retained sales.

4. Is GMV the same as sales?

GMV is not the same as sales revenue. While GMV reflects total merchandise value sold, sales revenue accounts for deductions such as discounts, refunds, and ecommerce platform fees, showing how much money the business actually earns.