It’s social. It’s retail. But what exactly is poshmark?
It's a peer-to-peer fashion marketplace for women built around mobile devices. The app allows you to easily sell items from your closet or buy items from someone else’s closet. The increasingly popular company hosts about $400 million worth of for-sale items – everything from dresses to handbags.
Breakout sat down with Poshmark's founder and CEO Manish Chandra who explained how it all works.
"What you do is you take out your iPhone and within a couple of minutes you can create merchandise out of any item in your closet. You can take a few photos of your shoes, handbags and you have a listing. Then we take care of payment, processing, shipping, customer service. So when it sells, it’s very very easy. All you have to do is put the item in a box and collect your money. "
Poshmark makes its money by deducting a 20 percent commission from all your sales. It may sound a lot like eBay but hold on, there are some differences.
"First is we built it [for] mobile," Chandra says. "So essentially your store, your cash register, your payment processor, your shipping, everything is on your iPhone which makes it very very convenient. We take care of everything around payment processing, shipping, transactions. So it’s both safe for the seller and also safe for the buyer."
Since its launch in 2011, Poshmark has grown quickly. This year over a million items were bought and sold through the site, and the company is using profits to make improvements to their framework.
"It’s actually a business that generates cash every month," Chandra points out. "We’re in widespread negotiations with the payment processor of the [United States Postal Service] where it’s sort of 'how do the whole infrastructure systems work?' And that investment is where a lot of our cash is going so that we can scale it up and ultimately have millions and millions of women who are selling actively on the platform."
And Poshmark customers are using the marketplace in several different ways.
"We have a woman in Houston using it like a revolving closet. In the course of a year she has bought and sold 400 items," Chandra says by way of example. "Another woman, in LA, who started by selling from her closet and now sells over $20,000 worth of inventory every month. So she’s become a mini boutique and could become our first million dollar seller next year. Then we have a mother of a couple of kids and she has stopped going to the mall. She does all of her shopping on Poshmark because she gets such amazing bargains."
Today, over 300,000 closets, or boutiques, have opened on poshmark. That’s more than the number of brick and mortar boutiques in the country. So could poshmark one day replace them altogether?
"I think there is a very reasonable opportunity to create a massive e-commerce company," Chandra says. "I think when you look at fashion, it’s a $350 billion a year market in the US. 75% to 80% of it is women’s fashion. Women of America are putting about a trillion dollars worth of inventory every three years into their closets...I think there’s real real chance that we can create a very large independent company."
Chandra thinks the company’s success is based on it’s social aspect too. His goal is to create a community where women can talk fashion and share love.
"People are actually forming meaningful friendships," he says. "They are spending way too much time with each other. They’re neglecting their boyfriends, they’re neglecting their husbands and we get these terms like posh and posh friends forever. Which is very unique."