Manish Chandra, Poshmark

Building luv

Today, Poshmark is one of the biggest fashion marketplaces in the world, promoting a sustainable, circular economy. With a global presence, the company has amassed over 80 million users. It was purchased by Naver Corporation, a South Korean company, for $1.2 billion in 2022.

The company’s and its CEO’s journey wasn’t all smooth sailing. Although the idea had the backing of several investors, the road to success had its fair share of challenges. We sat down with Chandra to pick his brain and talk about live streaming, influencer marketing, competitors in social commerce, and much more.

Here are the main takeaways from our conversation:

●     Entrepreneurs should invest in building communities with their ideas. That’s important for both engagement and monetization. The success of Poshmark can be attributed to focusing on building a community. It’s not merely a marketplace but a social collaboration that brings the community together for various purposes. For some, it helps declutter their closet. For some, it’s a way to earn extra cash. For some, it’s a way to find cool fashion without spending a fortune. There’s still room for innovation in the C2C retail space in fashion, as it’s poised to dominate the industry in North America and Europe.

●     Senior management at Poshmark spends hours daily understanding the customers, working to solve their issues and make the platform better for them. Over the years, Poshmark has developed a network of ambassadors bringing in revenue in five or six figures while marketing the platform further into their communities. This relationship has benefited both sides. With the lower attention span of the average user, the window for engagement is very small. Learning about customers is critical for entrepreneurs to resolve their pain points.

●     Among marketing trends, live streaming has great potential. However, it’s still in beta as more platforms need to use it. Live streaming will help usher in an era of video commerce, which is exciting for businesses and the communities they cater to. Using live stream parties with multiple community members would be a good idea for maximum engagement.

●     Influencers are great for budding businesses, but how they select influencers needs to change. Attracting the right influencers who share the passion and vision of the company is critical. Volume isn’t exactly the key to successful influencer marketing. Instead, work with micro-influencers that cater to niche communities and have much higher engagement, even if with just a few thousand people. So do your research and find influencers who share your passion and would be happy to work with your brand.

●     Charge the right price for the product or service. Some entrepreneurs don’t charge enough and risk going out of business. At Poshmark, the rate was 20% from the beginning, as it was crucial for maintaining a margin that’s sustainable for business. A high margin equals higher growth, but you must also provide enough value to justify that high margin. Do your cost and growth analysis to determine the right margins to attain the targeted growth from the very beginning.

●     Poshmark isn’t just focused on sustainability, it’s what the platform calls ‘cool sustainability.’ It doesn’t just cater to users buying secondhand clothes to save money or reduce their carbon footprint, many users want to get their hands on fashion they can’t find anywhere else. The platform didn’t center on the sustainability narrative but focused on cheap and popular fashion that people needed. Of course, increased sustainability is a positive outcome of that. Don’t make your mission or vision too serious, as having fun is just as important.

●     Poshmark would be able to ride out the current economic slump, especially for the e-commerce sector, due to inflation. The platform has been building communities and those communities of sellers would help the platform sustain economic uncertainty. Poshmark isn’t simply an e-commerce platform but a social platform that fosters the social component with its community focus. So it’s part social and part commerce, which is markedly different from purely e-commerce platforms that are vulnerable to low consumer spending in the wake of inflation. It’s yet another outcome of building strong communities with your business, as these communities help shield businesses from economic difficulties.

●     Competition is important, but don’t be bothered with competitors too much, as focusing on innovation than competitors should always take precedence. Too much focus on the competition can hurt business, driving attention away from customers. So make customers your number one priority, always.

●     Poshmark will continue to expand into new markets and categories, and with the launch of video commerce, there’s potential for increased profitability. Also, Gen Z consumers will drive growth for secondhand fashion, as this new generation is keen on buying pre-loved goods as conscientious consumers and because they want to find unique things. Also, fashion and music are super connected, so there are many opportunities for fashion platforms. Look for opportunities in the crossover of fashion and music.

●     For leaders, it’s necessary to lead with compassion. It’s very important to be excited about what you do. To come up with the right product or service, innovation and experimentation are not enough, having the instinct is just as important. If you believe in what you offer, others might follow suit.