Gross Merchandise Value (GMV) is the total dollar value of all merchandise sold through a platform or store over a given period, calculated before deducting returns, discounts, seller fees, or any other costs. It represents the full face value of transactions - what customers paid at checkout in aggregate - making it the broadest possible measure of commercial volume flowing through a business.
GMV is most commonly used as a top-line metric by marketplace businesses (Amazon, Etsy, eBay, Shopify as a platform) because it captures the total economic activity they facilitate, even when they only retain a fraction of each transaction as revenue. For a marketplace that charges a 10% take rate, GMV of $10M generates $1M in revenue - the two numbers tell very different stories about the size of the business, and which one you lead with depends on what you are trying to communicate. Direct-to-consumer brands running their own Shopify stores use GMV less frequently because their GMV and gross revenue are nearly identical - the main differences being returns and chargebacks that reduce net revenue below the GMV figure.
Where GMV becomes most practically relevant for Shopify brands is in evaluating channel performance across platforms with different fee structures. A brand selling on its own Shopify store, Amazon, and TikTok Shop simultaneously may track GMV across all three channels as a unified volume metric, then apply each channel's cost structure (Shopify fees, Amazon referral fees, TikTok commission rates) to arrive at comparable net revenue figures. This makes GMV a useful input for channel mix decisions even for brands that primarily report on revenue and contribution margin.
In fundraising and valuation contexts, GMV is frequently used by e-commerce investors and acquirers as a scale signal - particularly for marketplace or platform businesses where revenue multiples alone would understate the economic footprint of the business. For DTC brands, revenue and EBITDA typically remain the primary valuation inputs, but GMV growth rate is a useful indicator of top-line momentum that smooths out the volatility introduced by return rates and discount strategies.
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