What is the difference between GMV and revenue which is more important from a marketplace perspective? (2023)

What is the difference between GMV and revenue?

Is Gross Merchandise Value the Same as Revenue? Depending on the type of e-commerce site, GMV is the same as gross revenue. However, for sites like eBay, it is a reflection of the total value of goods sold, but not the actual revenue the company makes, as a portion of those revenues is for the sellers of the goods.

The three most important metrics are liquidity, provider-to-customer ratio, and repeat purchase ratio. Business metrics tell you how you are doing financially and whether your business model is actually working.

When the customer pays the supplier, the marketplace charges a percentage or a fixed fee for its services. The platform may charge either the seller or the buyer. Another scenario is taking a commission from both of them. This marketplace revenue model is the most common since the fee is justified.

Gross Merchandise Value (GMV) is a metric used to determine the total value of your sales over a given period. GMV is a good indicator of your eCommerce store's growth because it measures your sales volume and value—revealing how well your store is performing over time.

GMV or GTV

For example, provided your business model is based on commission, you had better track the GTV (Gross Transaction Value). GMV is the total dollar value of everything sold through a marketplace in a given period of time.

Return on Investment (ROI)

Return on investment is one of the most important metrics to track in order to know if your marketing strategies performed well or not.

Marketplace performance management is knowing which metrics are key to success and which levers to pull in order to grow those metrics.

What is marketplace liquidity?

Marketplace liquidity is a metric that defines how successful your marketplace is and can be explained as the probability that each user on your marketplace, whether on the supply or demand side, can get what they came for.

Commission

With the commission model, a marketplace gets money from each transaction it processes on the platform. You can charge either the seller, the buyer, or both, collecting either a percentage from each deal or a flat fee. The commission model is one of the most widespread.

Revenue management leads to innovation – in both the creation of new products and services and their pricing. This innovation leads to increases in revenue from sources companies may not have previously explored. For example, a sit-down restaurant might add delivery, pick-up and catering revenue streams.

It describes the manner in which a product or service is created, how it's sold, who it's sold to, the products' profit margins, and how the business is competitive in the marketplace. Though they aren't the same, a business model is similar to a business plan.

Giving consumers the option to bundle their products can help you boost your company's GMV by increasing the number of goods sold. Typically, bundles come with a discount, which will make your customers happy and help you get rid of more inventory. Bundling can also increase your AOV.

Turner said one of the most common vanity metrics he encounters is gross merchandise volume (GMV), or the total dollar value of a retail company's sales over a given period.

Amazon's growth in a relatively short period is only continuing to prove that it is a retailer like no other. Amazon's gross merchandise volume (GMV) for 2021 is predicted to be $600 billion worldwide.

GTV does not represent revenue earned by us. Gross Transaction Volume or “GTV” means the total dollar value of transactions processed through our cloud-based SaaS platform in the period, net of refunds, inclusive of shipping and handling, duty and value-added taxes.

1. Sales Revenue. We chose to put this metric first as it can tell a lot of things about your company. Month-over-month sales results show whether people are interested in buying your product/service, are your marketing efforts paying off, are you still in the competition, and much more.

Which metric is the best indicator of a successful business?

Net income ratio

The net income ratio, or profit, is the money left over when a company subtracts its expenses from its revenue. Businesses have traditionally viewed this metric for measuring value and it can be a quick indicator of whether your company is thriving.

Facebook Marketplace algorithm

“ For buyers, we use computer vision and similarity searches to recommend visually similar products (e.g., suggesting chairs that look similar to the one the buyer is viewing) and the option to have listings translated into their preferred language using machine translation.