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Poshmark unveils wholesale plan
30
Oct '15
Poshmark, an American online peer-to-peer marketplace for second-hand fashion items that has raised $40.5 million to date, has said it has teamed up with more than a dozen apparel and handbag makers to expand from resale to retail, according to media reports.

The company has partnered with several fashion labels and will let some of its best sellers buy merchandise from them at wholesale prices that they can then sell via Poshmark. The new partnerships with brands, including Style Mafia and Snob Essentials, will allow Poshmark's most successful sellers to purchase new items wholesale. The sellers can either hawk them on the app or on other e-commerce sites.

According to co-founder and CEO Manish Chandra, although most items sold through Poshmark are still second-hand clothing and accessories, the startup estimates that between 10 per cent and 20 per cent of items sold were originally purchased wholesale. That organic activity alone was convincing enough for Poshmark to set up its own wholesaling programme.

The company is currently working with about a dozen smaller brands, but hopes to expand to 30 or 40 by the end of the year, Chandra said. The plan is to also work with bigger and more well-known brands as well, and to span across all price points, from affordable fashions to high-end luxury brands. It’s also leaving each brand to decide its own terms and recommended retail prices and minimum purchase quantities for the wholesale program.

Poshmark’s sellers, on the other hand, get to buy brand-new items at discounted prices, which in turn helps them differentiate their offerings and command higher retail prices—and profits. They can also skip the trade shows and other channels they would normally have to go through to buy items at wholesale.

In another innovation, the company is also creating the Poshmark Fashion Entrepreneurs Fund, which will give 50 grants of $500 each to selected sellers starting in January so they can buy new inventory and jump-start their Poshmark businesses.

Poshmark competes for hand-me-down shirts and shoes with eBay, ThredUp, TheRealReal and others. The challenge for individual sellers is where to find more inventory once they've cleaned out their closets. That's why Poshmark is moving into new clothing via wholesale and is doling out grants. Poshmark, which takes a 20 per cent commission on sales of at least $15 and a flat fee of $2.95 for sales under $15, said it hopes to encourage its 1 million sellers to continue expanding their businesses. The company is also hoping these changes will help it become a more influential sales channel for brands.

The US-only app uses elements of social networking to let buyers and sellers like, comment on and share items for sale. Chandra doesn’t expect much to change in terms of the app’s community. The users who were already selling retail will continue to do so, and now retail items will be marked clearly with a “retail” tag as opposed to buying a resale item from someone’s closet.

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