In The RealReal’s quarterly earnings last week, the company touted an impressive figure: gross merchandise value had reached a record $617 million in the quarter, up 22% from the quarter before.“We’re upleveling the customer experience, deepening trust and compounding our advantages,” company CEO Rati Levesque said on the call. “Our buyers are spending more, our sellers are more engaged, and the platform connecting them gets smarter every quarter.”
That marks four consecutive quarters of GMV growth of over 20% for The RealReal. The RealReal is one of many resale and marketplace-based companies that tout an impressive GMV, a figure that represents the total value of all products sold on the platform. Fashionphile, a competitor, has GMV of over $500 million, while Depop’s GMV is over $1 billion as of February. But does GMV tell the whole story?
Glossy spoke with several experts in the resale and marketplace industry about why GMV is such an important stat, and how it can mask other details about a company’s performance. On the one hand, any successful marketplace does need transaction volume to succeed. But what’s more important is how revenue is derived from GMV. There’s a limit to how much commission a marketplace can charge, as going too high will likely send sellers and buyers to other platforms. Instead, marketplaces and resale platforms are starting to look for alternative methods to bring in money beyond their GMV-derived commission through tactics like selling ads that run within their marketplace or charging sellers for additional features, like shipping and operational support or access to additional buyer data.
