Every quarter, we have a version of this conversation:
"We grew 60% in GMV last year. But somehow there’s less money in the account than there was 18 months ago. What’s going on?"
What's going on is that the brand is winning the metric they're tracking and losing the one that actually matters.
GMV is a top-of-funnel number
GMV tells you the gross value of orders that flowed through the channel. It does not tell you:
- What you paid in marketplace fees, FBA fees, return logistics, and storage.
- What you spent on ads to generate the GMV.
- What your contribution margin looked like after discounts, promotions and event-day pricing.
- Whether the GMV came from your hero SKU or from a long tail that's draining working capital.
A brand can grow GMV 2× and lose money faster. We've seen it more than once.
Profit is the only number that compounds
Marketplace growth that doesn't generate cash isn't growth — it's burn dressed up as a chart. Cash funds the next 90 days of inventory, the next campaign cycle, the next category launch. GMV funds the next investor deck.
The unsexy truth: most marketplace brands need less GMV and better unit economics.
How we optimise the right number
Every engagement starts with a margin teardown, not a campaign plan:
- SKU-level contribution margin after all marketplace costs.
- TACoS, not just ACoS — total ad cost against total sales, so brand-funded campaigns aren't hidden in a different dashboard.
- Return-cost-per-order by SKU and category.
- Event-day price elasticity, modelled against margin, not just volume.
Then we decide which SKUs to scale, which to deprioritise, and which to kill. Sometimes the answer is to grow slower and earn more. That's a feature.
What we tell every new client
If you want a partner who'll celebrate GMV milestones in your founders' WhatsApp group, we're not it. If you want a partner who'll tell you that your 30% GMV growth came at a contribution-margin loss and you should slow down — that's us.
Profit > GMV. It's not a slogan. It's the only sustainable way to scale a marketplace business.