One entrepreneur made his business out of providing opportunities for self employment to other entrepreneurs.
Poshmark CEO Manish Chandra is the main brain behind the operation, stating that the idea for an app that lets you resell your clothes came to him while looking at his wife’s closet full of barely or never worn piles of clothing. He previously founded Kaboodle in 2005 (acquired by Hearst Media), which was one of the first social communities for women’s fashion, similar to Pinterest.
Chandra comes from a fashion tech background, but while an app seems like an obvious choice for a clothing reselling platform, Poshmark was actually almost too ahead of its time. Despite investors saying this was a horrible idea, Poshmark was launched as a mobile only/no website business, similar to PunkPost. The iPhone 4 had just been released in 2010, a key factor in Chandra’s opportunity to get ahead of the smartphone dependence and roll out his fashion tech service.
@Poshmark is an online marketplace where people can buy and sell clothing from boutiques or their own closets. Sellers upload photos of their items from their phone to the app to list them for sale. Poshmark takes a $2.95 commission on all sales under $15 and a 20% commission on any sales above $15, putting the profitable business on track for $100 million in revenue. In May 2018, the company announced that it had paid out $1 billion to its sellers so far.
Given that fashion in the U.S. is a $250B industry, 80% being women’s fashion, it’s no surprise that only about a third or clothing gets worn regularly. The secondary fashion market is around $5 – $7B, so Poshmark sees quite a few competitors. The company stays ahead by constantly innovating itself with stylist-match technology, voice integration with Amazon’s Alexa, more men’s and children categories, eliminating the shopping cart for instant buying to increase conversion, a user interface that looks like social media, themed Posh Parties, designers selling newly made pieces, and honing in on Pinterest capabilities with app integration and rich pins.
The community has grown into something more than the founding team ever imagined since its start in 2011 in Redwood City, California. Today, Poshmark has 25 million items and hopes to IPO in the near future.
In addition to the company’s timing with the iPhone, Poshmark was also right on time with the millennial trend of vintage clothing being trendy and important to the environment. Buying used clothing lost its stigma, and many users have turned reselling clothing into a full time job, making six, sometimes seven figures in sales a year. It often starts by selling from their own wardrobe and then turns into a full time job of flipping gently worn clothing for profit. Suzanne Canon was the first seller on Poshmark to pull in $1 million in sales, and many other sellers are close behind.