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I've probably been guilty of this but I think revenue & GMV can be confusing terms based on how a lot of commerce works via the internet. For reference, our com
by dsugarman 11y ago
I've probably been guilty of this but I think revenue & GMV can be confusing terms based on how a lot of commerce works via the internet. For reference, our company used to do dropship e-commerce.
Amazon, for example, uses revenue for first party sales and GMV for third party marketplace, Amazon never owns the product in third party marketplace. If you are a dropship retailer though, you have flash ownership because you buy from the dropship wholesaler and then you sell to the customer using a marketplace or website. You could say Amazon is different here because they physically have the products, but with net payment terms up to and past 180 days, it really isn't much different.
Also, if you just consider revenue to be your cut of GMV and you have net payment terms that gives your company high free cash flow, that seems important to distinguish as well.
[Update] The main point of my post is to show how confusing these terms are in one instance, and every business is different so it is really important to clearly define how you use the terms you are using
- npalli 11y agoTwo quick points 1. You have switched the terms in your amazon example. Amazon uses GMV for 1st party and revenue (its cut of GMV) for 3rd party marketplace. 2. Why would you have flash ownership in a dropship model? Seems to me that would be a regular wholesale/retail model not dropship.