With the company being valued at $537.5 million, Poshmark, a popular social commerce marketplace for buying and selling clothing, has found some serious success since its debut in 2011. With milestones like $12 million in funding from investors back in 2012, the birth of independent fashion brands on their platform, and over 4 million sellers in 2018 alone, there’s no doubt about it that Poshmark has made a huge mark in the clothing industry. With success like this, many businesses are wondering what it costs to build a platform like Poshmark, what core features are needed for success, and what advice should be taken from their success.
The Poshmark platform takes buying and shopping for clothing to a whole new level, specifically a whole new social level. This social marketplace focuses on connecting buyers and sellers who are looking to either sell off or purchase fashion items, fashion accessories, and luxury goods. Customers are able to browse through the market and search according to specific criteria like women, men, kids, brand, trending, and popular collections. Although the marketplace does focus on fashion items and luxury goods, you can find everyday items from middle-market brands like Michael Kors. You may also come across some exclusive designer couture and high-end fashion brands like Louis Vuitton and Chanel. Poshmark also allows users to sell unwanted or unworn clothing and has secure payment methods like credit cards, PayPal, and Apple pay.
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User Authorization Is Required
Whether you are a shopper or a buyer, you must sign up and provide a name, email address, username, password, and gender or sign up using an existing Facebook or Google account. If you do not sign up, you cannot have a seller’s page and despite being able to view listings, you cannot make any purchases.
Sellers Have Individual Pages
Buyers are able to see all information about a seller on these pages. Anything from recent comments received and given to brands that they follow when their last activity was when their start date was on the platform and what their average shipping time is.
Sellers Have Listing Pages
Buyers are able to view all products that a seller has listed on this page. Buyers are able to filter through these products by color, price, and size.
There is an Item Search
Anyone using the website can choose to use the search bar which will pull up relevant listings or choose to use the product cards or product filtering system.
There is a Product Preview
Buyers are able to view the product, see the product description, see multiple images of the product from different angles and see what sizes it is available in.
Secure Payment Options
The website uses a payment gateway that handles all transactions on the site. Buyers are able to use credit cards, debit cards, PayPal, and Apple pay. Sellers are able to withdraw their money through the payment gateway as well.
An Escrow Payment System is Used
A third-party holds onto the payment funds between both parties involved in the transaction until all terms of the agreement are met. This means that payment is withheld until the buyer is satisfied with their purchase and accepts the goods.
Social marketplaces like Poshmark make money by combining various fee models into their business. This ensures that all transactions of value that go through the marketplace provide some kickback to the marketplace itself. Common revenue streams for websites like Poshmark includes the following.
Websites like Poshmark will charge the seller a fee on all sales. Poshmark specifically takes a $2.95 commission on sales worth $15 or under and 20% on anything over $15.
Buyer will pay a flat-rate shipping fee to Poshmark for their package to get shipped to them. Poshmark charges $6.79 per package.
Payment Processing Fees
If buyers or sellers are using electronic payment transfers through carriers like PayPal, there will be a processing fee attached.
Sellers can pay a fee to have their listings shown above all others for a specific amount of time. This helps these sellers gain visibility in the market.
Fees for Adding Listings
Sellers may be charged a fee to list a product on the market. Etsy does this with their $0.20 listing fee.
Make sure that your marketplace puts significant emphasis on customer experience. When you have happy customers, you will generally have more revenue flow. For Poshmark specifically, they chose to partner with USPS to allow sellers to avoid the need for stamps. When buyers make a purchase on Poshmark, they can purchase a pre-paid, pre-addressed label, allowing the seller to drop it off or have the package picked up for free.
Build up a wide community around your marketplace. Allow your buyers and sellers to talk about the niche they are engaging in beyond just the transaction. Poshmark allows its sellers and buyers to engage in opinions, views, and discussions about their love of fashion. People enjoy being a part of a community so make sure to hold events.
Always make sure to take security to the highest level possible so that you can prevent scams and inauthentic goods from circulating your marketplace. This is why it is highly recommended that you utilize an escrow payment system so that the buyer can indicate that they have received their order as per the agreement terms. This prevents sellers from sending fake goods as a buyer can just simply ask for a refund if the item has been misrepresented.
Although we cannot say exactly how much Poshmark paid out to have their website made, we can do some estimation based on development time, features, and how many teams were required to make the website. We are looking at approximately six teams: quality assurance specialist, project manager, business analyst, UI/UX designers, backend developers, and front-end developers, working anywhere between 2,000-2,500 hours total across 10 team members. Now the final price will be dependent on the hourly rate per hour in the country you are sourcing your team roster from but should be anywhere between $45,000 – $60,000.
Let’s Nurture is an ISO 2015:2009 certified eCommerce marketplace app development company. Our Android app developers and iOS app developers, business consultants, web developers and designers are savvy of business ideas across all industries. Their understanding of client requirements help in delivering a quality product with flawless UI/ UX with best-in-class features.
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