Gross Merchandise Value (GMV)

What it is: GMV is the total value of products sold through an eCommerce platform within a specific period. It serves as a performance indicator to gauge business growth and the volume of transactions.

Why it is important: GMV provides an overview of the scale and performance of an eCommerce business. It represents the total value of products sold, regardless of the revenue the business generates after deducting fees, returns, or discounts. GMV helps assess market traction, track sales growth, and evaluate the effectiveness of the eCommerce platform.

Formulas: There are no specific formulas associated with GMV.

How to use it in the context of startups: Startups operating eCommerce platforms should track GMV to monitor the growth and success of their business. Analyzing GMV trends over time helps identify patterns, evaluate the effectiveness of marketing and sales strategies, and make informed decisions regarding inventory management, pricing, and customer acquisition efforts.