Gross Merchandise Value

Gross merchandise value, often shortened to GMV, is widely used by online marketplaces, e-commerce platforms, travel booking sites and delivery apps to show the scale of activity happening on their platform.

It is important to understand that GMV is not the company's revenue. A marketplace usually keeps only a small share of each transaction as fees or commissions. For example, if a marketplace processes 500 million of sales in a year and charges an average commission of 12%, its GMV is 500 million but its revenue is about 60 million.

The share of GMV that a platform keeps as revenue is sometimes called the take rate. In this example, the take rate is 12%.

GMV is useful for tracking a platform's growth and market share. However, because it is much larger than revenue and does not reflect profitability, it can make a business look bigger than it really is. Investors therefore look at GMV alongside revenue, take rate, profitability and customer measures to judge the health of a marketplace business.