Gross Merchandise Value (GMV): Meaning and Formula (2026)

Gross merchandise value (GMV) measures the total value of goods sold through your store or platform, before expenses and fees, over a specific period of time. Tracking it helps you compare sales activity from one month, quarter, or year to the next.

By using GMV to track your store’s performance and combining it with other metrics you can fine-tune your marketing and pricing strategies, making real changes to your earnings and profitability. 

This guide covers what GMV is, how to calculate it, why it matters, and its limitations.

What is gross merchandise value (GMV)?

Gross merchandise value (GMV), also called gross merchandise volume, is the total dollar value of goods sold through a business or platform during a defined period. It measures sales activity before deducting business expenses.

Companies calculate GMV differently. The treatment of refunds, discounts, shipping and handling, taxes, and duties depends on the company’s reporting definition.

What it counts: Merchandise sales during the reporting period, plus any customer charges specified in the definition. Check whether the figure reflects discounts and whether refunded orders are deducted.

What you don’t subtract: Product costs, payment processing fees, marketing expenses, and other operating costs. Those expenses affect profit. Shipping charged to a customer is also different from the expense of paying a carrier.

Two company filings that illustrate these differences:

• Shopify. Its 2025 annual report defines GMV as order value after refunds, including shipping and handling, duties, and value-added taxes.
• Etsy. Its comparable metric, gross merchandise sales, measures merchandise sales after refunds and excludes shipping fees.

Shopify facilitated $378.4 billion in GMV in 2025. That figure represents orders facilitated through the platform, not Shopify’s own revenue.

GMV and similar terms

In ecommerce, GMV refers to gross merchandise value or volume. It measures merchandise sales, not the market valuation of a company or its assets.

Other businesses use related measures:

These terms describe transaction activity, but their calculations aren’t interchangeable.

How to calculate gross merchandise value

For a product sold at one price, the GMV formula is:

GMV = Selling price x Number of units sold

For multiple products or prices, calculate each total separately, then add them together. Apply any adjustments specified in your GMV definition.

Here’s how to calculate GMV for a handcrafted jewelry store:

1. Set the reporting period. Use a defined window, such as June 1–30. Apply the same dates to every sale and adjustment in the calculation.
2. Define what counts. This example measures product sales only, excluding shipping and handling, taxes, and duties. Assume there were no discounts or refunds.
3. Calculate sales for each product. The store sold 200 necklaces at $50 each: 200 x $50 = $10,000. It also sold 150 bracelets at $30 each: 150 x $30 = $4,500.
4. Add the totals. June GMV is $10,000 + $4,500 = $14,500.

You can also calculate GMV using average order value (AOV):

GMV = Number of transactions x Average order value

Suppose those 350 jewelry items were sold across 250 orders. Using the same product-sales total, AOV is $14,500 / 250 = $58.

GMV = 250 transactions x $58 = $14,500

For this formula to work, AOV has to use the same sales definition and reporting period as GMV. A dashboard’s AOV can treat refunds or shipping differently, so check its calculation first.

Keep comparison windows consistent, too. Compare a full month with a full month, or the same year-to-date dates in both years. Use the same currency and inclusion rules.

GMV vs. revenue: What’s the difference?

GMV measures the value of sales through a business or platform. Revenue is the income the business recognizes from selling goods or services, before deducting expenses. Your business model determines how closely the two figures match.

Revenue appears on an income statement. GMV is an operating metric reported separately.

For direct-to-consumer (D2C) brands selling their own inventory, revenue generally reflects the selling price after discounts and returns. GMV and revenue can be similar, but how customer charges are treated and the timing of sales can create differences.

For marketplaces arranging sales between third-party sellers and buyers, revenue generally comes from commissions and fees. The full value of the seller’s merchandise isn’t the platform’s revenue. Etsy, for example, earns transaction and payment-processing fees, as well as revenue from services such as advertising.

A marketplace formula is:

Revenue ≈ GMV x Take rate

The take rate is the percentage of transaction value the platform keeps as revenue before paying its own expenses.

For example, a marketplace processes $1 million in monthly GMV and keeps 10%:

Estimated monthly revenue = $1,000,000 x 10% = $100,000

If that 10% represents transaction fees, add advertising, subscription, or other revenue separately. If the take rate already uses total revenue, those amounts are already counted.

Neither figure is profit. Comparing revenue and expenses shows how much income remains after costs.

Why measure gross merchandise value?

GMV is a top-line key performance indicator that tracks sales value over time. It helps you assess sales performance, review pricing decisions, and explain growth to investors.

Show performance

Comparing GMV across periods shows how your sales value changes. If GMV increased from $50,000 in January to $75,000 in February, calculate the growth rate as follows:

GMV growth rate = [(Current period GMV − Previous period GMV) / Previous period GMV] x 100

[($75,000 − $50,000) / $50,000] x 100 = 50% growth

That’s growth in sales value, but not necessarily the number of items sold. Higher prices or a shift toward more expensive products can also increase GMV.

Year-over-year comparisons can show seasonal patterns. If sales regularly rise during the winter holidays, use that history to plan inventory and promotions.

Inform pricing strategy

Marketing teams use GMV to see which campaigns and pricing changes increased total sales value. Reviewing product-level figures also shows how much each product contributes.

Suppose your $20 skirt sells more units than your $50 skirt but contributes less GMV. You could test selling it as part of a bundle. Compare sales value, units sold, and profit per order before and during the test.

Use gross margin return on investment to compare the gross profit generated by a product with the average inventory cost required to stock it.

Attract investors

GMV gives investors a measure of sales activity. Monthly GMV rising from $100,000 at the beginning of a year to $500,000 at the end shows growth in transaction value.

Present that trend using financial statements that cover metrics such as revenue, profit margins, and repeat purchases. The GMV figure itself won’t prove that your customer base is growing or that those sales are profitable.

What GMV doesn’t tell you

GMV leaves several questions about business performance unanswered:

• It ignores profitability. Higher GMV doesn’t mean the business is keeping more profit. Product costs and operating expenses still need to be paid.
• Definitions vary. Some companies count shipping and taxes or deduct refunds, others use different rules. Check those definitions before comparing figures.
• Business models affect revenue. A retailer selling its own products recognizes product sales as revenue. A marketplace arranging third-party sales generally earns commissions and fees. The same GMV can produce different revenue totals.
• Promotions and returns can overstate performance. Discounts and free shipping can increase orders but reduce profit per sale. GMV calculated before discounts or refunds also counts amounts the business doesn’t retain. Refund-adjusted GMV deducts those refunds.
• It doesn’t measure customer retention. Track active buyers and repeat purchases separately. In Etsy’s consolidated 2025 results, active buyers fell 2% and gross merchandise sales fell 5.3%, yet revenue grew 2.7%.

Profit also influences how much money a business can reinvest. In a 2025 Shopify survey, 79% of store owners said they use profits to self-fund growth.*

How to interpret GMV alongside other metrics

In that same 2025 Shopify survey, 77% of store owners reported tracking sales or total revenue, while fewer than half tracked profit margin, average order value, or conversion rate.*

Review GMV with these complementary metrics:

• Revenue. The income your business earns from sales.
• Conversion rate. The share of store visits that result in purchases.
• Customer acquisition cost (CAC). What you spend to acquire each new customer.
• Average order value (AOV). The average amount spent per order.
• Profit margin. The percentage of revenue kept as profit.

Shopify’s analytics features are available on all subscription plans. You can also customize and save reports regardless of your subscription.

To find the sales figures for your GMV calculation:

1. In your Shopify admin, go to Analytics > Reports.
2. Filter the category to Sales, then open Total sales over time.
3. Select your reporting period and comparison dates.
4. Review the metric that matches your GMV definition.

Shopify’s sales labels have different meanings:

• Gross sales. Product price times quantity, before discounts and sales reversals. Excludes shipping and taxes.
• Net sales. Gross sales minus discounts and sales reversals.
• Total sales. Net sales plus taxes, duties, shipping charges, and fees.

These figures are inputs for GMV. Sales reports also include pending, unpaid, and canceled orders, so their totals don’t reflect cash received.

GMV and revenue

For a retailer using a before-discount definition, GMV represents the gross value of sales. Revenue reflects the sales amount earned after the discount.

Using the jewelry example above, a 10% discount on $14,500 reduces revenue by $1,450:

Revenue after discount = $14,500 − $1,450 = $13,050

This assumes no returns or other adjustments. If your GMV already reflects discounts, it would also be $13,050 in this example. Subtracting the discount again would understate sales.

Neither figure accounts for your product or operating costs. Two stores with identical sales can earn different profits.

GMV and customer acquisition cost (CAC)

Customer acquisition cost measures what you spend to acquire a new customer:

CAC = Sales and marketing acquisition costs / New customers acquired

Spending $10,000 to acquire 500 customers gives you a CAC of $20. 

Marketing teams pair GMV with CAC, gross margin, and marketing ROI to judge whether acquisition spending is increasing sales profitably. Compare acquisition costs with the gross profit contributed by those customers.

GMV and average order value (AOV)

Average order value measures the average amount spent per order. In the Shopify 2025 survey, 85% of store owners earning $1 million or more tracked revenue, while only 52% tracked AOV.*

When GMV and AOV use the same sales definition and reporting period:

• Rising GMV and stable AOV. More orders account for the growth.
• Rising GMV and rising AOV. Higher spending per order contributes to growth. Check order count to see whether customers also placed more orders.

Shopify’s AOV calculation uses gross sales minus discounts, divided by orders. It excludes post-order adjustments, shipping, and taxes. Multiplying that AOV by order count won’t reproduce a GMV figure that counts those amounts.

Tips to improve your gross merchandise value

Once you’ve calculated GMV, test ways to increase completed orders and average order value.

International selling can bring in new customers. Shopify Markets lets you manage international sales from one store. With Shopify Payments, customers can browse and pay in local currencies, where available. Factor delivery costs and currency conversion fees into your pricing before expanding.

Here are four ways to increase sales from your existing store. 

Offer free shipping

In a 2026 Baymard survey, 40% of US online shoppers cited high extra costs, such as shipping, taxes, and fees, as a reason for abandoning a cart in the previous three months.

Free shipping can encourage shoppers to complete their orders. Adding free shipping when a minimum spending threshold has been met can also encourage larger purchases. Check that the profit on qualifying orders covers your delivery costs.

You can add a free shipping threshold to an existing shipping option in Shopify:

1. Go to Settings > Shipping and delivery and open the relevant shipping profile.
2. Under Shipping zones, open the menu beside the shipping option and select Edit shipping option.
3. Select Offer free shipping and enter the minimum order amount.
4. Click Done, then Save.

Test orders below and above the threshold to confirm the correct rates appear. Display the threshold on product and cart pages so customers can see it before checkout.

Upsell and cross-sell products

Recommend products that match what a customer is already considering:

• Upselling. Suggest a higher-priced version with relevant features, such as a larger carry-on suitcase.
• Cross-selling. Suggest a complementary item. For example, recommend a reusable filter with a travel coffee maker.

Shopify Search & Discovery lets you select related and complementary products for your product pages. In the app, open Product recommendations > Add recommendations and select the product you want to edit. 

Assign the products to recommend, then save. Use related products for alternatives and complementary products for add-ons.

Your theme needs compatible recommendation sections or blocks. Add these to the product template in the theme editor, then check how the recommendations appear on desktop and mobile.

Sell product bundles

Product bundling groups products into a single offer. Approaches include:

• Pure bundling. Products are available only as a bundle.
• Mixed bundling. Customers can buy products individually or together.
• Price bundling. Customers pay less for the combined products than they would separately.

Literie’s Founders Favorite Trio, for example, combines three candle scents on one product page. Shoppers can add the complete set to their cart in one action.

“We make three candles at a reduced price, and it’s one click as opposed to adding three separate candles into your cart,” Founder Erica Weber says in a Shopify Masters interview.

“That [bundling] saves time just through our warehouse and allows people to make larger purchases—perhaps larger than they would have when they were coming just to purchase one candle.”

For a bundle test, select products customers commonly purchase together. Set a price that accounts for the combined product and fulfillment costs, and compare order value and profit with individual purchases.

The free Shopify Bundles app lets you create fixed bundles and multipacks directly in the Shopify admin. Customers can select available product variants, and inventory updates in real time.

Reduce checkout friction

Baymard’s 2026 survey found that 17% of US online shoppers abandoned orders because checkout was too long or too complicated.

“We monitor how quickly customers move through the purchase process because our goal is to make it as swift as possible,” says Anna M. Peterson, former product lead at Everlane. “The longer customers linger on the checkout page, the more they might reconsider their purchase, potentially leading to abandoned carts.”

Review these parts of your checkout:

• Offer guest and accelerated checkout. Let customers purchase without creating a store account. Shop Pay lets customers save their payment and delivery details for future purchases.
• Provide relevant payment options. Offer the payment methods your customers use. Check eligibility before adding options such as Shop Pay Installments.
• Make delivery costs and timing clear. Display shipping charges and estimated delivery times before customers commit to an order. Keep those estimates consistent with your fulfillment capacity.

Test checkout on desktop and mobile devices, including address entry and payment. After making changes, compare checkout completion rates and GMV over equivalent periods.

Use GMV to grow your ecommerce business

GMV shows how much you sell. Profit and cash flow help you decide how much growth your business can afford.

In the 2025 Shopify survey, 20% of store owners said they wished they’d waited for more consistent cash flow before scaling. That was the most common regret, just ahead of waiting for profitability at 19%.*

Put your GMV figures to work:

1. Record a baseline. Calculate GMV for a defined period using consistent rules. Record order count, average order value, and profit for the same dates.
2. Test one change. Try a free-shipping threshold or a product bundle. Set a review date and spending limit. Use a break-even analysis to estimate how many additional orders the test must generate to cover its costs.
3. Check the results before expanding. Compare sales and profit after delivery and acquisition costs. Run a cash flow analysis to confirm you can cover additional inventory and supplier payments.

Expand the changes that improve sales and profit at a pace your cash flow can fund.

*Based on a November 2025 survey of 500 Shopify merchants conducted in English across Australia, Canada, the United Kingdom, Ireland, New Zealand, and the United States. Respondents were established merchants with two or more years on the platform. Results reflect the experiences of this specific sample and may not be representative of all merchants.