Startup Seven: Poshmark Makes Reselling Your Wardrobe Simple & Social

Startup Seven: Poshmark Makes Reselling Your Wardrobe Simple & Social

“We built Poshmark in a way that makes everything appear as simple as possible—just so nobody has to worry about anything.”

Since TWF is a huge fan of the movement toward ease and immediacy, we were obviously intrigued.

Poshmark is a mobile app that makes reselling unwanted items in your closet a social and stylish experience. Co-founder Tracy Sun says, “One of the things we identified really early on is that there are sites and places where you can take your unused awesome items to get rid of them, and get good money in return—but people aren’t doing it, at least not in large numbers. One of our theories is that it’s because the process is too hard; it’s a chore. And you can always come up with reasons to procrastinate chores.” By merging the simplicity of the mobile app with the power of social communities, Poshmark emphasizes the excitement and style inspiration that can be found through the act of selling items from your closet.

Poshmark’s CEO and co-founder, Manish Chandra, previously founded the social shopping site Kaboodle (along with Gautam Golwala and Chetan Pungaliya, who both also happen to be co-founders of Poshmark).  He had a hunch that he would soon merge the worlds of fashion and technology, as both of these realms were exploding. Tracy, a former fashion industry executive (one of the first at Brooklyn Industries), found herself frustrated with the old school model of selling fashion to consumers—which led her to investigate the technology realm. She exited NYC and headed for Silicon Valley, in hopes of finding a tech savvy collaborator—and thus, Poshmark was birthed.

We sat down with Manish and Tracy (both of whom couldn’t be more authentic and lovely) to find out more about their company.

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Third Wave Fashion: Tell us about your company.

Poshmark: To preface, every year in the U.S. alone we spend close to $300 billion dollars on fashion, in the form of clothing, accessories, jewelry—basically this means that, as a group, we’re filling our closets with $300 billion dollars worth of inventory a year. That’s a lot of stuff sitting around in closets across the country.

Quite often when we look into our wardrobes, we’re seeing items that aren’t exactly frequently used; forget about the pieces that only get worn once or twice, many items remain in unopened shopping bags or hanging in the closet with their tags still on. (Sound familiar? Us, too.)

We’re talking thousands of dollars of stuff cluttering our spaces, forgotten or never used. There are channels available through which to dispose of these items—consignment stores, Ebay, Craigslist—but the challenge is twofold: one, each of these channels has different levels of hassles and emotions associated with it. So if you’re using Ebay, sending an item can end up becoming a very complex process; Craiglist has the potential to be sort of icky with the whole factor of meeting a stranger in person and trying to sell them something; and at consignment stores, there’s that daunting fear of rejection—will they even accept my merchandise? The second challenge is that in many of the marketplaces, the process of finding beautiful items and the joy surrounding the discovery of such things can be much less; it becomes more of a chase.

There isn’t this whole emotional engagement element that you might find in other fashion places like Zappos, Gilt Groupe, or Nordstrom—where you can leisurely enjoy the whole experience of shopping.

What we really wanted to do was simplify the seller’s experience so that it becomes sort of like a social media act; you take a few photos, and instantly you’re ready to sell. On the buying side, we wanted to bring a sense of joy and an emotional social connection so that it becomes really fun to buy and engage with the product. That’s really where we’ve married the whole social discovery aspect with an e-commerce platform. Instead of using some standard off-the-shelf e-commerce technology, we’ve actually built a platform from the ground up. From a pure tech perspective, we started with the database design and started to layer on top of that to build a platform that is truly unique.

When a user would like to sell an item, she just takes a few pictures using her iPhone, enters a few sentences describing the item, and she immediately has a listing (literally, in less than five minutes). This is instantly broadcast through a social network to people who are following the user. When another user finds this item and wants to purchase, all she has to do is click the “buy” button, provide her credit card information, and it’s done. The money goes immediately to Poshmark, who keeps this full charge. At that point, an email is generated to the seller, informing her that her item has been sold; attached to that email is a prepaid, preaddressed shipping label—meaning no hassle addressing a package or sorting out postage. The seller simply places the item in a box and slaps on the shipping label. Our software then tracks that shipment (each of these items has a tracking code built in) and when it is delivered to the buyer, a notification is generated. The buyer has up to three days to reject the item—she can accept immediately upon receipt, but is allowed three days to decide.  After that period of time, if it isn’t rejected, there is an auto-acceptance and the money is released to the seller.

We take a 20% commission on the total price of the item and the rest is sent to the seller’s Poshmark account. The seller can either keep the money in her account to use it for future Poshmark purchases, or withdraw it in cash. The great thing about the system is that it’s dead simple. We had a woman join the site at 10am; list an item by 12pm; sell her item by 2pm; and by 4pm, she had shipped the item. We also handle all front line customer support, so if there is any issue, we resolve it immediately. So if you’re a seller, you’re just sitting there sipping your coffee or glass of wine after you’ve shipped the item—we take care of any issues. When it’s all said and done, the user knows exactly how much she’s going to make because she’s not going to spend anything else after that; if she lists an item for $100, she knows she’s going to make $80—no unpredictable costs involved.

Additionally, we’ve created a platform which makes the whole act of shopping extremely real-time and fun, via our virtual shopping parties which we call “Posh Parties.” These parties are live shopping events happening on your phone through the app—each party has a particular theme and users buy and sell fashion surrounding the established theme. It’s a group selling and buying experience that is made even easier because of this theme. Instead of trying to figure out what item in her closet to put up for sale, the user knows tonight’s theme is.for example, “Party Dresses!” It’s really fun and interactive—the user gets real-time feedback, and quite often, depending on the listing and pricing, her item might get sold right then and there. Even before the item sells, the user starts to get emotional feedback from the community, and that makes the whole thing just really engaging and addictive.

TWF: We’re curious to know about the decision to make it mobile only.

Poshmark Manish: When I first conceptualized the idea of doing this entire marketplace on the web back in 2009, the challenge I saw was that fashion is a very visual experience; so much is dependent upon the photography and the quality of the images that are created. When looking at various other channels, the imaging of products was quite variable. There may be some very high quality images and then some really unimpressive images and, as a result, the experience can feel very spotty. The challenge at that point was how exactly to create consistent imaging. Zooming forward to Fall 2010, the iPhone 4 was released into the market and brought with it two very important things: a great camera with great processing capabilities and a great screen—the images were gorgeous. The combination of these two technologies rejuvenated my interest in the original idea and it started to become reality.

The advantage of mobile is the simplicity of taking gorgeous photos and immediately uploading them and making them live. Additionally, the Posh Parties are beautiful to execute on the mobile phone because users can attend them from anywhere. We’ve had a user sitting in a bar in Atlanta, creating listings from photos she already had in her iPhone, and selling items at a Posh Party—all at the same time. Which is pretty amazing.

TWF: If you could describe your company in five words, what would they be?

Poshmark: Fun; simple; fashion; community; human.

TWF: Tell us about your team. Who does what and how do you manage your staff?

Poshmark: We’re a small team right now. I’d describe the team’s composition as having three very core strengths. One is really thinking about what the users want: fashion, editorial, merchandising—sort of this whole operational aspect. That team is comprised of several people and is led by Tracy. Then we have a hard core technology team that’s very focused on building real-time broadcasting technologies, e-commerce, integration, and experiences. They build the complexity in the technology infrastructure, which ultimately provides the simplicity of user experience. The third aspect is really thinking through the overall consumer experience and the community tone. When it comes to managing the team, we’re creating something that is both collaborative, respectful, and built to last.

Collaboration is very key in terms of everything we do. I believe in 100% communication so there is never any information that is hidden; my philosophy is that details of the company—from sales to payroll to stocks—should be very open and available because that makes everyone feel very much a part of the team. The second aspect is being very respectful. Everyone here has different avenues of expertise and in order to leverage that, you have to be extremely respectful of people; if you can do that, then you can create something much bigger than any single human being. We’re all part of this growing organization.

The last piece is fun. Often, we end up spending more time working than we do anything else—even spending time with our families—so it needs to be something that is enjoyable. Fun isn’t just partying, but also creating something or doing something meaningful; you’ve got to enjoy the whole process.

TWF: What is unique about your company?

Poshmark: We’ve spoken about the uniqueness of the back end technology of Poshmark, but it’s certainly unique in the fashion aspect as well: we’re potentially turning every closet in the country into its own store. As the user is listing items from her closet, people can discover her and in return, she can discover her style twins and inspirations and “follow” them. Now she has a collection of closets (full of style she loves) that she’s continually monitoring! This is ridiculously amazing.

Think of the style bloggers whose wardrobes you’ve been drooling over for years or professional peers who always seem to be piecing outfits together in ways you’ve never dreamt of—Poshmark enables each person to not only put their closet for sale, but to also put their style inspiration for sale. We encourage editorially inspired outfit posts that are styled in the user’s own special way—this often tips people to actually purchase!

Poshmark not only brings a large, fashion-oriented audience to find your stuff; it also incorporates the concept of Posh Parties so people can shop your items in real-time from all across the country.

TWF: What are your future plans?

Poshmark: We’re really just starting in terms of taking our product to market, so we have lots of goals. Certainly growing our user base; then seeing how we can enhance the e-commerce experience, simplifying the buying experience even further (while making it even more secure), and making shipping even easier.

On the product side, there are some features we’d like to add to the system, such as new ways of browsing the product inventory; by category, brands, etc. We’d like to look at and add other platforms such as Android and Pure Web Architectures. Additionally, right now we’re doing three Posh Parties a week and our plans are to continue to scale that number (the diversity and the timing of the events) and eventually make it so that anyone can host a Posh Party in the system, not just us.

TWF: Do you have plans to take the Posh Parties offline as well?

Poshmark: They are partially offline right now! Every time a Posh Party happens, it is always happening in the app. If the host of the Posh Party happens to be local (in the Bay area), we’ll invite them over to join the Poshmark team and we all enjoy the event together. The live Posh Parties are so amazing—we encourage our users to also get together with their friends because it’s much more fun to have a shared experience like that. It can encourage the user to make more listings if she has someone to take the pictures for her! In a way, a lot of it happens offline already. Right now though, the advantage of being online is just connecting women from across the country; it doesn’t matter where the user is located, she can log on and participate all the same. Having it all tie back into the app is really important.

TWF: Tell us about the market you’ve been trying to target and the response you’ve gotten so far.

Poshmark: The initial market was women in their 20’s and 30’s, but we’ve really been amazed at the diversity of the ages of our users. While twenty- and thirty-somethings make up a high percentage of the users, we’ve seen both older and younger women engaging with the site—including women in their teens, which we can see in both their merchandising and some of the back end data. What’s also exciting is the level of engagement that we’re seeing in the app—60%-70% of the users are coming back week after week, which is a very high percentage. We’ve had transactions from $5 up to several hundred dollars; a single user has made over $500 through a series of transactions.

The merchandising that we have, because we wanted to make it a universal phenomenon, can range from a $5 set of earrings to a $3000 Chloe bag. We’re seeing all kinds of diversity in the products—from shoes to handbags, dresses, jewelry, and sunglasses. As far as brands go, we’ve seen a range of designers from the luxury market (Marc Jacobs, Louis Vuitton, Gucci, Coach, Chloe, etc.) all the way down to small indie designers. On a given day, we have users from over 40 states log into our site, so it feels like we’ve hit on something that’s truly working.

TWF: What things inspire you most – whether in business or in life?

Poshmark Manish: Things that have a very high impact are very inspirational; I’m intrigued by something that can impact a lot of people in a very positive way. Something else that’s really interesting is innovation. Why is this thing that looks so weird and different actually making my life simpler? The iPhone is a great example of this—people first looked at it four years ago and thought, “How can I use a phone without a keyboard?” It was a difficult thing to conceptualize, but once you started using it, within two days, you’re addicted to that experience. I’m also inspired by people who have a sense of humanity around them; people who are real, who are human—as opposed to those driven by a singular dimension. Someone who can manage extreme success with extreme humanness in their approach to life is truly inspirational.

Poshmark Tracy: I’m definitely inspired by finding a way to make an impact in people’s lives. There’s no deluding ourselves here; we’re not curing cancer, we’re not ending world hunger—but what I find incredibly inspirational is when we get an email into our customer support line just to say thank you because someone sold something and they’re reaping the emotional and financial benefits of that. It’s one person at a time, one item at a time—but if we do what we set out to do we could make a huge impact on people’s daily lives.

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Poshmark takes a process that people would like to do more of, but often don’t because of its inconvenience—and makes the procedure completely effortless and totally fun. We think that this is a great equation, and look forward to watching their success.

Third Wave Fashion has been your fashion tech think tank since 2011. We publish the first ever printed fashion tech magazine, Third Wave.  Follow us on Twitter or subscribe to our newsletter to stay on top of the latest in fashion tech + wearables.

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