5 ms·

It's a term of the trade in the retailing (and by extension e-commerce) industry. It refers to the value of the goods sold. If a retailer sells a widget for $10

It's a term of the trade in the retailing (and by extension e-commerce) industry. It refers to the value of the goods sold. If a retailer sells a widget for $100 at 50% margin, then the GMV is $100 and revenue to the retailer is $50.

martinflack 11y ago
I'm pretty sure if a retailer sells a widget for $100 then the revenue is $100. COGS is $50. GMV is probably a term more useful in situations where the entity is not a retailer per se, like eBay, who still wants a number to represent the value of the goods they are facilitating transactions upon. They don't own the items on auction so the purchase price is not revenue to them, but the fees are revenue.
gnufrra 11y ago
I always thought GMV is more like gross revenue. So if you sell 5 of these widget at $100 your GMV is $500. Which is different from your Net Sales. Because let say if one of these widgets got returned. And one of them was sold at 20% discount. Your GMV will still be $500 but your net sales will be: Net Sales = GMV - (discount $20) - (returns $100) = $500 - $20 - $100 = $380
rz2k 11y ago
What is the value of this number? I can see how some research into operations would identify the cost incurred by holding a certain value of inventory, but decreasing inventory costs by selling at a discount without recognizing that decrease in value really seems like it is using the number for the wrong purpose entirely. Sure, if you're looking into decreasing insurance costs or something, but I how is it defensible when trying to explain your value to investors?
Havoc 11y ago
>It's a term of the trade in the retailing No its not. I've seen dozens of retailing operations in multiple countries. None use this term, which brings me smoothly to my next point... >It refers to the value of the goods sold. aka CoGS (Cost of Goods Sold) (or CoS in some regions). Unlike GMV you'll actually find that on the financial statement of major retailers. As I said: >Must be some type of startup slang so to speak. Would be curious to hear if there is some actual business reason that warrants giving this a new name in the startup context though...
- saurabhtandon 11y ago
  Here is the wiki definition - https://en.wikipedia.org/wiki/Gross_merchandise_volume https://en.wikipedia.org/wiki/Gross_merchandise_volume eBay and many other marketplaces use it. My guess is that since these marketplace platforms are not actual retailers their GMV is pretty high as compared to revenue. To showcase the dollar value of total sales that happened on the platform they use GMV. But again I am not an expert in this field.
  - Havoc 11y ago
    >Here is the wiki definition - https://en.wikipedia.org/wiki/Gross_merchandise_volume https://en.wikipedia.org/wiki/Gross_merchandise_volume Yeah I googled it too - a while ago - wikipedia isn't exactly a winning moving here. >eBay and many other marketplaces use it. That is deeply disingenuous. You originally said its "term of the trade in the retailing". I called bullsht - because I know its not used in retailing. In response you shift your argument (!!!) and reckon its used by ebay (FYI NOT A RETAIL OPERATION) - and copied the ebay stuff straight off wikipedia. >I am not an expert in this field Indeed.
    - hussong 11y ago
      I think you were accidentaly conflating the two users sumanthvepa and saurabhtandon (happened to me too, btw). Personal attacks aside, you point still stands and I want to thank you for bringing some actual financial expertise into the discussion :-)
- waterlesscloud 11y ago
  Wait... I thought COGS referred to the production costs of goods sold. The direct material and labor costs. For example, in a restaurant it would involve food costs and wages for cooks. GMV sounds like it refers to what in this example would be revenue from the finished food. A burger COGS is meat+bun+cook, a burger GMV is the menu price. Am I wrong in my understanding?
  - pmikesell 11y ago

martinflack 11y ago

I'm pretty sure if a retailer sells a widget for $100 then the revenue is $100. COGS is $50. GMV is probably a term more useful in situations where the entity is not a retailer per se, like eBay, who still wants a number to represent the value of the goods they are facilitating transactions upon. They don't own the items on auction so the purchase price is not revenue to them, but the fees are revenue.

gnufrra 11y ago

I always thought GMV is more like gross revenue. So if you sell 5 of these widget at $100 your GMV is $500. Which is different from your Net Sales. Because let say if one of these widgets got returned. And one of them was sold at 20% discount. Your GMV will still be $500 but your net sales will be: Net Sales = GMV - (discount $20) - (returns $100) = $500 - $20 - $100 = $380

rz2k 11y ago

What is the value of this number? I can see how some research into operations would identify the cost incurred by holding a certain value of inventory, but decreasing inventory costs by selling at a discount without recognizing that decrease in value really seems like it is using the number for the wrong purpose entirely. Sure, if you're looking into decreasing insurance costs or something, but I how is it defensible when trying to explain your value to investors?

Havoc 11y ago

>It's a term of the trade in the retailing No its not. I've seen dozens of retailing operations in multiple countries. None use this term, which brings me smoothly to my next point... >It refers to the value of the goods sold. aka CoGS (Cost of Goods Sold) (or CoS in some regions). Unlike GMV you'll actually find that on the financial statement of major retailers. As I said: >Must be some type of startup slang so to speak. Would be curious to hear if there is some actual business reason that warrants giving this a new name in the startup context though...

saurabhtandon 11y ago
Here is the wiki definition - https://en.wikipedia.org/wiki/Gross_merchandise_volume https://en.wikipedia.org/wiki/Gross_merchandise_volume eBay and many other marketplaces use it. My guess is that since these marketplace platforms are not actual retailers their GMV is pretty high as compared to revenue. To showcase the dollar value of total sales that happened on the platform they use GMV. But again I am not an expert in this field.
- Havoc 11y ago
  >Here is the wiki definition - https://en.wikipedia.org/wiki/Gross_merchandise_volume https://en.wikipedia.org/wiki/Gross_merchandise_volume Yeah I googled it too - a while ago - wikipedia isn't exactly a winning moving here. >eBay and many other marketplaces use it. That is deeply disingenuous. You originally said its "term of the trade in the retailing". I called bullsht - because I know its not used in retailing. In response you shift your argument (!!!) and reckon its used by ebay (FYI NOT A RETAIL OPERATION) - and copied the ebay stuff straight off wikipedia. >I am not an expert in this field Indeed.
  - hussong 11y ago
    I think you were accidentaly conflating the two users sumanthvepa and saurabhtandon (happened to me too, btw). Personal attacks aside, you point still stands and I want to thank you for bringing some actual financial expertise into the discussion :-)
waterlesscloud 11y ago
Wait... I thought COGS referred to the production costs of goods sold. The direct material and labor costs. For example, in a restaurant it would involve food costs and wages for cooks. GMV sounds like it refers to what in this example would be revenue from the finished food. A burger COGS is meat+bun+cook, a burger GMV is the menu price. Am I wrong in my understanding?
- pmikesell 11y ago