Gross Merchandise Value (GMV)

The total value of goods or services sold through a marketplace in a given period.

Definition

GMV represents the total sales volume transacted through a marketplace platform. It's not the platform's revenue - revenue is the take rate (commission) applied to GMV. For example, if a marketplace processes $10M in transactions with a 15% take rate, GMV is $10M but revenue is $1.5M. GMV is the top-line metric for marketplace businesses.

GMV growth shows marketplace health, but it can be misleading if take rates are declining or if GMV includes returns and cancellations. Investors look at GMV alongside take rate, net revenue, and unit economics.

Why it matters for founders

GMV indicates the total value your marketplace creates for participants. High GMV signals strong demand on both sides of the marketplace. However, GMV without healthy take rates and unit economics is a vanity metric.

Example

Etsy reported $13.3B GMV in 2022 with a ~20% effective take rate (marketplace fees + payments + ads), generating ~$2.6B in revenue. Their GMV growth of 150% from 2019-2022 reflected the shift to online shopping and their expansion into new categories.

How Foundra helps

Foundra helps marketplace founders model GMV targets alongside take rates and unit economics to ensure the marketplace model is viable before scaling.

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