Gross Merchandise Value (GMV)
GMV is the total value of merchandise sold through a channel over a period, before refunds, cancellations, fees and discounts come out. It's a volume metric, not revenue: useful for measuring channel scale and growth, quoted constantly in ecommerce press and investor decks, and 15% to 30% larger than the net revenue that belongs on your P&L. Confusing the two is how sellers accidentally overstate their business, to others and to themselves.
The gap between GMV and revenue is structural. A brand with $3 million of GMV might net out to $2.4 million of accounting revenue after $250,000 of refunds and cancellations and various discounts, and take home far less after fees. Lenders and buyers know this, which is why a pitch built on GMV gets discounted on sight, while a seller who states GMV and net revenue side by side, with the bridge between them, reads as someone who knows their numbers.
GMV does have one bookkeeping job: it's the family of gross figures your 1099-K reports, so the bridge from gross volume down to net revenue is exactly what an IRS matching notice or a diligence request asks you to produce. Books built from settlement reports maintain that bridge automatically, every month, as part of monthly bookkeeping.
Where this shows up in our work
This isn’t textbook material for us; it’s the day-to-day of keeping seller books right. See how we handle it in practice:
Monthly Ecommerce Bookkeeping→Related terms