Posts by: Yieldify Marketing

(GMV) Gross Merchandise Value: Meaning & Calculation

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What is GMV | Yieldify

What is Gross Merchandise Value and why is it important to your eCommerce business? We break down what GMV means, how you can calculate it, and how you can improve your GMV.

When you are running an eCommerce website or deal with any kind of retail, it is vital to know what GMV is. Also known as Gross Merchandise Value or Gross Merchandise Volume, this important figure tells you the total value of goods you have sold over a certain period. This is a good metric to keep in mind when working on ways to increase sales and expand your company’s bottom line.

Below, we’ll take a look at everything GMV: what it is, why it is so important, and how you can improve your own GMV while making sales to satisfied customers.

What is GMV (Gross Merchandise Value)?

Gross Merchandise Value (GMV) is a metric that measures your total value of sales over a certain period of time. It’s a metric that is most commonly used in the eCommerce industry and is also sometimes referred to as Gross Merchandise Volume. 

GMV can be used to determine the overall health of an eCommerce business, and a good indicator of growth. This is because it measures the volume and value of merchandise sold or the number of transactions handled. So if your GMV is up, business should be good!

According to the Corporate Finance Institute, eCommerce GMV should be measured at least once per year, if not once per financial quarter. However, it’s important to note that the Gross Merchandise Value calculation is made before the deduction of fees and expenses associated with the sale of products. This includes things like the cost of delivery, discounts, advertising costs, and returns, etc.

GMV is at its most useful when it’s being used as a comparative measure over time. This could be comparing current quarter sales vs the previous, or year on year. Ultimately, Gross Merchandise Value is another way companies can understand and put a figure on their sales numbers.

How to Calculate GMV

The simplest and most common way to calculate GMV is by using the formula below. This simply takes the price charged to the customer and multiplies it by the number of items sold:

Gross Merchandise Value =  Sales Price of Goods x Number of Goods Sold

So let’s say you sell 10 products for $100 each, your Gross Merchandise Value would amount to $1,000.

Why you shouldn’t rely on GMV alone

Calculating your GMV in this way will give you a good idea of how much growth your business is experiencing as it looks at how much you are actually selling. However, you shouldn’t rely on it solely as the one formula to determine how healthy your company is. 

This is because while Gross Merchandise Value tells you how much you’re growing, it doesn’t tell you whether or not you are actually profiting off the real value of the items you sell.

For example, if GMV was your company’s primary growth metric, you may focus on more expensive, big-ticket products as the sales price of these products will help boost your total transaction value. 

However, the margins on such products are often much lower than cheaper products such as clothing. So as you can see, it’s not necessarily an accurate representation of an eCommerce company’s performance.

So going back to our example above if those 10 products you sold for $100 cost you $75 to make or purchase, you’re only making $250 profit.

You won’t be able to use this formula to determine if you are selling your items for too much or too little as it doesn’t take into account margins. Number seven on our list below can help you do that!

So should I still track GMV?

Yes, it’s still an important metric as it essentially calculates your total gross sales value. Of course, you want this figure to be relatively high as sales are the lifeblood of any eCommerce business.

When you use this figure comparatively, you want it to be growing, whether it’s year-on-year or quarter vs quarter. If it’s growing, it means you’re either selling more, or you’re selling more expensive items both of which should be good for your bottom line.

But as we mentioned above there are other financial metrics that can help determine the performance of your eCommerce business. 

Consider using other eCommerce KPIs to get a more balanced and accurate view of your performance:

1. Net Merchandise Value (NMV) is what you get after you deduct all the fees and expenses from your Gross Merchandise Value over a period of time. It’s a more realistic look into how your business is actually performing as it takes into account costs, refunds, etc.

NMV =  GMV – All Costs (marketing, refunds, gateway payments)

2. Customer Acquisition Cost (CAC) is calculated simply by dividing all costs spent on acquiring customers (including software costs, eCommerce merchandising tools included, marketing team salaries, etc.) by the total number of customers acquired in the time period the money was spent.

So let’s say you spent $5,000 on marketing in one month and acquired 500 new customers. Your CAC would be $10.

CAC = Total Marketing Spend / Number of acquired customers

This is an important metric as it essentially tracks the effectiveness of your advertising, and how much you are paying to get new customers. If this figure is too high, you’ll be eating into margins and wasting your budget.

3. Customer Lifetime Value (CLV) works out the amount of money customers will spend with you over the entire life of your relationship. To calculate CLV you’ll need to define LTV first, that is Lifetime Value:

LTV = AOV x Number of transactions x Retention time period

CLV = LTV x Profit margin

CLV essentially tells you how well you are retaining customers and how much they like your product or service. The higher this number, the greater your profits will be. If it’s low, you know you need to work on your customer retention strategy, or that something in your product or service isn’t meeting customer expectations.

4. Average Order Value (AOV) tracks the average amount a customer will spend each time they place an order. It’s simply calculated by dividing the total revenue by the number of orders.

AOV = Revenue / Total Number of orders

It’s clear you want this number to grow as it means your customers are spending more money with you, again this links back to CAC and increasing your CLV. If the amount is low you may need to look into ways of increasing your AOV.

5. Conversion rate (CVR). For eCommerce websites, this will be one of, if not the most important KPI to track. Conversion rate is an important metric that shows how your overall website is converting visitors into customers.

CVR = Number of transactions / Number of sessions

6. Profit Margin per Product (PMpP) will help you determine which products to push, how much you can discount, and where to keep a closer eye on things because margins are tight.

Product margin per product is easy to calculate. For example, if you sell a product for $25, and it costs $20 to make, the gross profit margin is 20% ($5 divided by $25).

PMpP = (Product price – Product cost) / Retail price

7. Net Promoter Score (NPS) is a customer loyalty and satisfaction metric. The score is taken from asking customers how likely they are to recommend your product or service to others on a scale of 0-10.

Satisfied customers mean returning customers so again the Net Promoter Score metric can help improve lifetime value and average order values as customers will be willing to spend more with you as they know the product or service will deliver. 

3 ways you can spark GMV Growth

So if GMV is one of the financial metrics you are tracking, you’ll want to see this figure increasing. Since gross merchandise volume is the direct measurement of your growth, it only makes sense that smart e-commerce business owners will be looking for ways to improve it.

Need some ideas on boosting your Gross Merchandise Value? Here are a few:

1. Offer Free Shipping where you can

A study by UPS showed that 58% of online shoppers are willing to add additional items to their order if it means they get free shipping… Offering free shipping either across the board or after customers have reached a certain price threshold can be a great way to boost your GMV and your sales overall.

Not to mention this will increase the base value of your average order, as customers will start to add more items in order to qualify for free shipping.

2. Invest in cross-selling strategies

Cross-selling is a powerful way to get customers to buy more. The best part is, you don’t have to do much to convince them; it’s the customer that makes the final decision to buy more and expand their shopping cart. 

You can add a “frequently bought with this item” window on your product pages, or even offer some accessories as last-minute add-ons on the checkout page. You’d be surprised how much this can boost your GMV!

3. Add bundles

Another great way to encourage your customers to buy more (without being too pushy about it) is to offer bundles and packaged deals. Not only is this effective for getting rid of some of your less-popular inventory, but it also can significantly improve your GMV. 

Customers will be happy to invest in a bundle since they are getting more products than usual for a price that is much better than usual, so they will feel that they are getting a great deal. Meanwhile, you are making bigger average sales, getting rid of old inventory, and boosting your GMV. It’s a win-win situation!

How to improve Gross Merchandise Value (GMV)

Final thoughts

So whilst GMV will be a good metric to look at to determine total sales value and if this is improving, it needs to be used in conjunction with other metrics to give you a true picture of business performance. 

It is critical to consistently measure your growth over each month to determine what you may be doing right or wrong. By creating more buying opportunities for customers using smart cross-selling strategies for adding bundled deals, you will be encouraging more activity on your website.

GMV FAQs

? What is GMW & What Does It Mean?

GMV or Gross Merchandise Volume is a term in eCommerce that shows the total sales value for merchandise sold through a marketplace over a specific time frame.

? How is GMV calculated?

To calculate GMV simply take the sale price per item charged to the customer and multiply this by the number of items sold. For example, if you sell 10 t-shirts at $50, the GMV is $500.

? How can I boost GMV growth?

There are many ways you can attain GMV growth. We detail 3 easy ways such as offering free shipping, product bundles and cross-selling strategies.

Google Analytics Integration with Yieldify

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With GA integration for the Yieldify Conversion Platform, you can deepen your understanding of your traffic behavior to deliver better customer journeys that convert.

To optimize the customer journey, you need to test out different conversion tactics. But where do ideas for those tests come from? According to eConsultancy, 77% of marketers get ideas for which CRO tests to run from their analytics platform. By far the most popular tool marketers use to track and measure traffic behavior is Google Analytics. If you’re using GA, there’s now a new smart and simple way to take your insights to the next level with Yieldify.

Deepen your understanding to drive conversions

With our GA integration for the Yieldify Conversion Platform, you can easily contextualize the impact of Yieldify against your overall website analytics to enrich and inform your conversion strategy.

Our GA integration sends Yieldify campaign data to your GA in realtime, so that you can view it in the wider context of your overall website analytics. With it, you can easily compare each visitor’s interactions with Yieldify against the historical data you have on them in GA. The integration gives you sight of all the data you need to answer key questions such as: “Where did people that saw campaign X come from?” or “What session were people on that saw campaign X?”

All your data, all in one place

The simple one-click integration ensures that GA is your single source of truth for real-time measurement and reporting on all your digital marketing. It couldn’t be easier to connect and view all your visitor journeys in one place and send all your Yieldify metrics straight into GA so you can cut the data however you see fit:

All it takes is a click: then Yieldify starts sending visitor interaction metrics into your Google Analytics.


Why go it alone? Get advanced insights from our expert Consultancy

Only a third of marketers say their companies are analyzing cart abandonment and yet 69% of carts are getting abandoned every day. That’s often because of a lack time, resource or necessary skills – but the truth is that companies that are not engaging with this problem are missing out on revenue. Yieldify can help.

Our expert Data Consultants are available to supercharge your results. Drawing on your GA data, Consultancy will perform a deep analysis, deliver insights and recommend the best strategy to optimize your customer journey.

Abandonment analytics is just the beginning: taking cues from GA and our learnings from delivering 155,000 campaigns, our consultants can benchmark your website performance by vertical and suggest tactics such as Dynamic Promotions and Dynamic Social Proof to help you secure every last conversion.

Boost Conversions with On-Site Banners

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Great customer journeys are made up of great experiences. Today, we’re releasing a new way to help you deliver them on your website. Introducing… Banners.

Banners sit flush against the top, bottom or side of the screen. With a strategically placed Banner, you can influence purchase decisions at critical moments. Use them to encourage browsers to sign up to your newsletter, highlight flash sales to returning customers or cross-sell to customers with items in their cart.

Banners examples

Deliver content that converts when it matter most

Bring your Banners to life using Yieldify’s extensive range of powerful content types: encourage urgency with a countdown clock, create FOMO with Dynamic Social Proof or drive up order value with Dynamic Promotions – and serve that message to the right customer based on their unique behaviour.

From Overlays and Notifications to our recently launched Floating buttons, the Yieldify Conversion Platform gives you access to a range of tools that helps you to optimise the customer journey. With Yieldify’s flexible range of on-site formats, you can maximise relevant and personal engagement with every customer to take your conversion strategy to the next level.

Watch Banners in action:

Enhance the Customer Journey with a Floating Button Format

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How do you keep customers engaged on site? With difficulty. Considering that customers bouncing is a perennial challenge and 69% abandon without checking out, it’s never been more important to have quick and creative ways to interact with your customers, to keep them on track to purchase or encourage them to perform other actions that support your objectives.

From subtle messages delivered by Double Notifications to FOMO-inducing Dynamic Social Proof, the Yieldify Conversion Platform helps you deliver a range of approaches to keep those visitors engaged. Today, we’re pleased to launch another format to help you take your conversion strategy even further: the floating button format.

A powerful new way to interact with customers

The floating button format helps you engage customers on desktop as well as mobile. By providing this simple interaction, customers can expand a passive onsite message into an engaging overlay.

You might, for example, catch a customer’s attention with a subtle Notification and then, if they chose to engage, give them the option to share their email to unlock a promotion. Check out how major cosmetics brand Essie used a floating button format to achieve just that here.

Floating button example 2

Built to enhance the on-site journey

Keeping your offers in sight and in mind throughout the onsite journey can prevent code-hunters from straying off-site to compare offers and reassure them that an offer just for them can be accessed at the moment of their choosing. Until interacted with, the floating button is a persistent fixture on the page, meaning you can easily follow customers along their journey, keeping the offer front and centre.

Floating button format example

The perfect way to interact on mobile

The floating button format is designed with mobile shoppers in mind. With it, you can easily encourage conversions and capture leads from on-the-go shoppers. You can also use the format to drive app downloads, growing loyalty and increasing the opportunity for return purchases.

Keep Customers On Track to Checkout with Progress Bars from Yieldify

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Great onsite experiences keep your customers engaged and on track to checkout. Today, we’ve launched a new way to help you do just that.

Your customers are always on the look out for the best deal. In fact, a big reason why 69.23% of online shoppers abandon their cart is because they’re hunting for the best deal on the same or a similar product elsewhere.

So how do you fight this? There’s a lot you can do to your website to curb bounce rate, but if you’re going to consistently keep your customers from straying offsite, you’re going to need the right tools to engage them throughout their user journey.

A powerful new way to do this is to show a progress bar delivered by the Yieldify Conversion Platform.

Progress bars visualise how close a customer is to unlocking your onsite offers. The latest in a series of new smart content types available from Yieldify, it’s an inventive tactic you can use to optimise the customer journey.

Check out this video to see progress bars in action:

Encourage higher order value

You can motivate customers to check out with a higher-value basket by showing them a persistent visual of their progress towards unlocking an onsite offer. This is particularly effective when combined with a Dynamic Promotion which shows how much more a customer would need to spend to qualify for your onsite deal. It’s a great way to potentially increase average order value.

Mobile progress bar exampleVisualise progress to offers to curb abandonment

Failure to show costs transparently leads customers to ditch websites – 24% abandon their check out because they can’t calculate order value in advance – but increasing the visibility of your onsite offers can boost conversions. We’ve seen higher conversion rates and order values when customers see multi-offer progress bars that shows all the available discounts and their required thresholds.

Tablet progress bar example

Enrich the customer journey

A progress bar can be a neat way to add to the customer journey, optimising it for conversion. By showing a subtle bottom bar or corner notification, you can engage customers with a relevant message without interrupting their shopping experience.

Desktop progress bar example

Yieldify placed 24th in the Deloitte UK Technology Fast 50

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We’ve been listed as one of the UK’s top 25 technology companies!

We’re delighted to share that we’ve been placed 24th on the Deloitte UK Technology Fast 50 in recognition of our 1,144% growth. The Fast 50 result comes hot on the heels of our appearance in the 2017 Sunday Times Hiscox Tech Track 100 – also in a top 25 position!

For the past 20 years, the Deloitte Fast 50 has been a leading award programme, showcasing the fastest growing companies in UK tech. Previous winners include Skyscanner and Farfetch and we’re proud to rub shoulders with the likes of Deliveroo and GoCardless on this year’s shortlist.

Check out the full Fast 50 winners list here.

Introducing Flexible Targeting for the Yieldify Conversion Platform

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You need precise ways to connect with your customers. With Flexible targeting for The Yieldify Conversion Platform, you can now optimize the customer journey using the data on every page of your website.

71% of consumers prefer ads tailored to interests and shopping habits. In truth, people don’t hate marketing, they just hate bad marketing. And that’s just as true when visitors are browsing your website. With Flexible targeting, you can draw from the rich data on every page of your website to power your customer journeys. It makes it easy for you to give every customer a relevant, personal experience.

Deliver personal customer journeys fast

Improving your conversion rates doesn’t have to be a prolonged and painful process. Forget heavy-duty personalization – which 79% of 800 digital marketers surveyed say it is not easy to implement. Flexible targeting is powered by page-level data so there’s no need for lengthy and complex data integrations or linking up your data sources.

The freedom to write your own rules

How does it work? Flexible targeting allows you to target based on any datapoint you can see on a web page.

Let’s say you wanted to increase ticket purchases on specific journeys. You could use Flexible targeting to show your message to visitors browsing only certain routes, combined with Dynamic Social Proof to inspire FOMO (fear of missing out) and urgency in them.

Or why not drive account sign-ups by using Flexible targeting to identify logged-out visitors and give them a reason to sign up now:

Or you could determine which offer to show to abandoning website visitors based on the options they choose on a quote form:

These examples are just the tip of the iceberg – with Flexible targeting, the possibilities are almost endless. What’s more, you can use Flexible targeting rules on any campaign delivered by the Yieldify Conversion Platform. You can also combine it with an extensive range of other targeting and triggering rules to deliver unique website experiences that sell.

Expert advice and set up support

Yieldify’s Customer Success team is here to ensure that you get every last drop of value from this capability. The team will analyse your website customer journeys and recommend valuable use cases to support your objectives. Then, our Technical Solutions team will map your website and capture data points to get you set up with Flexible targeting rules at speed – you won’t need to lift a finger.