The new face of fashion retail
What do you get when you combine Goodwill, Ebay and Instagram? Well that gives birth to the leading marketplace to buy or sell fashion that is worth over $47.2 million in outside capital. Let me introduce you to Poshmark.
Developed by founder and C.E.O Manish Chandra, the idea was to create a virtual mobile marketplace directed towards women’s fashion, where new or second hand items can be exchanged or sold between Poshmark users.
Poshmark officially launched back in 2011, after raising $3.5 million in Series A funding from investors such as SoftTech VC, Mayfield fund, Inventus Capital Partners, and SC Angel.
In 2012 Poshmark put in motion a mobile app for iOS. After some success the mobile application caught the interest of additional investors, including celebrities Rachel Zoe and Ashton Kutcher. An additional $12 million was received in venture capital as a result.
Within the last year Poshmark expanded the app, making it available to the android marketplace. The company’s focus on a mobile approach contributed to a user base that is now at 90%. It is reported that Poshmark sellers upload over $2 million of new inventory on a daily basis.
In 2015 Poshmark raised $25 million in venture capital catapulting it as a heavy weight contender, with the likes of The Real Real, a high-end luxury consignment, for the top division in apparel apps.
Poshmark can be simplified to a community of buyers and sellers whose main interest is fashion. How easy is it to become Poshmark user? Simple all you need is a phone.
Once a profile is created the user can search an inventory of over 10 million items that are up for sale. With such an overwhelming inventory, Poshmark created a search filter designed to fit the users preferences and sizes to help navigate through closets.
Resembling to a post on a social media network the user can like, comment on or re-share an item. There is also the option to follow and be followed on Poshmark, making it easy to access the closet of fellow Poshmarkers.
If the buyer is interested in purchasing an item, the buyer can offer, buy, trade,or bundle the item.
Using the Buy Now tab the buyer is brought directly to checkout, where the buyer finalizes the purchase. The offer option allows the buyer to negotiate the price directly with the seller. A trade allows items from the buyers and sellers closet to be exchanged. The option to bundle allows the buyer to purchase multiple items from one closet and get an additional discount on all the merchandise.
The buyer is also responsible for paying shipping and handling.
The buyer is then brought to checkout, where a debit card or credit card is required and the shipping address is verified to complete the transaction.
Once the order is packaged and shipped out, the buyer can then check the status of the order by inputting the tracking number on the United States Postal Service website.
Upon delivery the client has 3 business days to check the inventory and decide if they want to keep the item before the funds are officially released to the seller.
If the client decides not to keep the item, then a case is submitted through Poshmark. Poshmark takes care of the rest and refunds the customer.
Poshmark also takes advantage of persuading its user base to browse, buy, and sell simultaneously by offering virtual themed events called “posh parties,” that consists of two-hour time slots of constant listings of merchandise.
Poshmark also provides the opportunity for self-entrepreneurs by allowing a platform where they can sell second hand items or become a retail seller.
The seller has control of marketing and advertising of their closets. As well as choosing the selling margin of their merchandise.
Once a seller sells an item(s), Poshmark takes a 20% sellers fee from the total. Poshmark emails the seller a shipping label for the order. The seller is then responsible for packaging and shipping out the order.
Funds aren’t released until the consumer receives the item and approves it. To protect the seller if the client fails to approve the order within 3 business days from the time the order was delivered, funds are released to the seller, without the approval of the client.
The funds are then transferred to the sellers account, under “My Balance”, where the seller can either use the funds to make a purchase from another Poshmark user or the funds can be requested in a form of a check or direct deposit.
Some women have made over $100,000 selling through the app and have started Poshmark-based businesses.
Poshmark is on track to double its revenue this quarter to $200 million in annual sales. With increasing funding, the company is looking to expand to men’s and kid’s wear and take on a global approach.