May 23, 2018
Online fashion marketplace Poshmark says its sellers have made $1 bln
May 23, 2018
Fashionistas have earned a total of $1 billion selling clothes and accessories through online marketplace Poshmark, the startup’s chief executive told Reuters on Tuesday, highlighting the opportunity still available for young ecommerce companies despite the ever-present threat of Amazon.com Inc.
The earnings have been spread across 4 million sellers on the site since the Silicon Valley company’s founding in 2011, said founder and CEO Manish Chandra, although much of the income is concentrated in a group of sellers making five, six and even seven figures. Poshmark keeps 20 percent of each sale.
For the current year, Poshmark is projecting annual revenue of $150 million to $200 million, according to a spokeswoman.
Poshmark, which has raised nearly $160 million from investors, is an online marketplace for individuals to sell clothes and accessories ranging from old T-shirts to high-end boutique dresses and private labels; shoppers can bid on the merchandise. Poshmark collects data on shoppers to offer personalized outfit suggestions, and individual stylists make fashion recommendations.
Chandra said the company marries the speed and efficiency of high-tech ecommerce - purchases are shipped within a couple days - with a personal touch not usually found online.
“It’s really a shopping experience that used to exist maybe 20 years back in the physical retail world,” Chandra said.
The company recently raised $87.5 million at a valuation of nearly $600 million, Reuters reported in November.
About 80 percent of shoppers make multiple purchases, and users open the Poshmark app seven to nine times a day on average, which Chandra credits for the company’s growth. He said the average price of an order is up as much as 50 percent in the last five years, so sellers are earning more money.
The company, which currently operates only in the United States, last year announced it would expand to Asia and Europe, although Chandra told Reuters it would be planning that move through at least the middle of the year.
Competition from ecommerce giants including Amazon, however, remains a threat. Amazon has a private label program with brands of clothing and shoes, as well as a personal stylist feature.
“Amazon is a competitor to a lot of people,” said Hans Tung, managing partner at GGV Capital and a Poshmark investor. “It will be interesting. Amazon is a company that everyone needs to respect what they could do.”
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