Software and internet platforms
Gross merchandise value (GMV)
The total value of goods or services sold through a platform.
Last reviewedWhat does Gross merchandise value (GMV) mean?
GMV is the total value of all orders placed through a marketplace or platform in a period, before the platform's fees and often before returns, cancellations and discounts. It is not the platform's revenue: revenue is roughly GMV times the take rate. Example: a marketplace with 5 million orders at an average order value of 40 has GMV of 200 million; with a 15 percent take rate its revenue is 30 million. Companies define GMV differently (some include delivery fees or taxes), so compare carefully.
Where does it come up in case interview prep?
- How e-commerce and marketplaces make moneyLesson in E-commerce, marketplaces, and quick commerce
- Order economics: last mile, dark stores, and returnsLesson in E-commerce, marketplaces, and quick commerce
- E-commerce players, trends, and how to crack the casesLesson in E-commerce, marketplaces, and quick commerce
- How internet platforms, marketplaces, and digital ads workLesson in Internet platforms, marketplaces, and digital advertising
- Platform unit economics: contribution per order and ad revenueLesson in Internet platforms, marketplaces, and digital advertising
- Internet platforms: players, super-apps, trends, regulation, and how to crack the casesLesson in Internet platforms, marketplaces, and digital advertising
Related terms
- Take rateThe share of each transaction's value that a platform keeps as revenue.
- AOV (average order value)Revenue divided by the number of orders.
- First-party (1P) versus marketplace (3P)Selling your own stock versus letting other sellers sell on your platform for a fee.
- Return rateThe share of items sold that customers send back.
- Annual recurring revenue (ARR)The yearly value of all active subscription contracts at a point in time.
- Net revenue retention (NRR)How much recurring revenue a group of existing customers brings in a year later.
- CAC payback periodHow many months of gross profit it takes to earn back the cost of winning a customer.
- Rule of 40A software company's growth rate plus its profit margin should add up to at least 40 percent.