How Does Poshmark Make Money? Poshmark Business Model In A Nutshell

Poshmark is a social commerce mobile platform that combines social media capabilities with its e-commerce platform to enable transactions. It makes money with a simple model, where for each sale, Poshmark takes a 20% fee on the final price, for sales of $15 and over, and a flat rate of $2.95 for sales below that. As a mobile-first platform, its gamification elements and the tools offered to sellers are critical to its growth.



Business Model ElementAnalysisImplicationsExamples
Value PropositionPoshmark’s value proposition is to provide a platform for users to easily buy and sell fashion items from their own closets. The company offers a convenient and social shopping experience, allowing users to discover unique fashion pieces, both new and gently used, at various price points. Poshmark emphasizes community and engagement, enabling users to connect, follow, and interact with each other. The platform empowers users to declutter their wardrobes, earn money, and explore a diverse range of fashion styles.Offers a platform for buying and selling fashion items from users’ closets. Provides a convenient and social shopping experience. Allows users to discover unique fashion pieces at various price points. Emphasizes community and engagement, enabling user connections and interactions. Empowers users to declutter their wardrobes, earn money, and explore diverse fashion styles. Attracts users seeking a social and sustainable shopping experience.– Poshmark’s platform allows users to easily list their fashion items for sale, providing a hassle-free way to declutter their closets. – The convenience of discovering unique fashion pieces from various sellers appeals to fashion enthusiasts and budget-conscious shoppers. – Community features like user connections and interactions enhance the social aspect of the platform, fostering engagement and a sense of belonging. – Users benefit from earning money by selling items and exploring a diverse range of fashion styles on the platform. – Poshmark’s value proposition aligns with users seeking both social and sustainable aspects in their fashion shopping experience.
Customer SegmentsPoshmark primarily targets fashion enthusiasts, budget-conscious shoppers, and individuals interested in sustainable fashion practices. The platform caters to a diverse audience of women, men, and children across different age groups. Poshmark users are interested in both buying and selling fashion items. Additionally, the company attracts individuals looking for a social and interactive shopping experience, including those interested in connecting with sellers and other users.Targets fashion enthusiasts, budget-conscious shoppers, and advocates of sustainable fashion. Caters to diverse demographics, including women, men, and children across various age groups. Attracts users interested in both buying and selling fashion items. Appeals to those seeking a social and interactive shopping experience. Provides a platform for user connections and engagement. Accommodates different shopping preferences and interests.– Poshmark’s diverse audience includes individuals from various backgrounds, ages, and fashion preferences, making the platform accessible to a wide range of users. – The platform accommodates both buyers and sellers, providing a comprehensive solution for fashion enthusiasts. – Poshmark’s social and interactive features appeal to users looking for a community-driven shopping experience, including connections with other users and sellers. – The platform’s flexibility accommodates different shopping preferences, from seeking unique fashion pieces to decluttering closets and earning money.
Distribution StrategyPoshmark operates as an online peer-to-peer marketplace accessible through its website and mobile app. Users can create listings, browse, and make purchases directly on the platform. The company utilizes algorithms and personalized recommendations to suggest fashion items to users. Poshmark fosters a social community through features like sharing listings, following other users, and participating in themed virtual parties. The platform facilitates shipping and payment processing, ensuring a seamless transaction process.Relies on an online peer-to-peer marketplace accessible through the website and mobile app. Allows users to create listings, browse, and make purchases directly on the platform. Utilizes algorithms and personalized recommendations to suggest fashion items. Fosters a social community with features like sharing listings, following users, and themed virtual parties. Facilitates shipping and payment processing for a seamless transaction process. Ensures a user-friendly and engaging online shopping environment.– Poshmark’s online platform provides users with a convenient and accessible marketplace for buying and selling fashion items. – Algorithms and personalized recommendations enhance the shopping experience by suggesting relevant fashion items to users. – Community features like sharing listings, following other users, and virtual parties contribute to the social aspect of the platform, encouraging engagement. – The platform’s integrated shipping and payment processing streamline the transaction process, making it user-friendly. – Poshmark focuses on delivering a seamless and engaging online shopping environment to foster user satisfaction.
Revenue StreamsPoshmark generates revenue primarily through fees associated with successful transactions. Sellers pay a commission fee on the final sale price, and buyers pay a shipping fee. The company also offers premium seller services, such as Poshmark Plus and Poshmark Premium, for a monthly fee, providing sellers with additional tools and visibility. Additionally, Poshmark earns revenue from its advertising and marketing partnerships with brands and retailers.Relies on revenue from transaction fees, including seller commission and buyer shipping fees. Offers premium seller services like Poshmark Plus and Poshmark Premium for a monthly fee, providing additional tools and visibility. Generates revenue from advertising and marketing partnerships with brands and retailers. Diversifies income streams to support financial sustainability.– Transaction fees provide a consistent source of revenue as sellers and buyers participate in transactions on the platform. – Premium seller services offer additional revenue opportunities while providing sellers with enhanced tools and visibility. – Advertising and marketing partnerships with brands and retailers contribute to diversified income streams and potential growth opportunities. – Diversification of revenue streams supports Poshmark’s financial sustainability and its ability to invest in platform enhancements and partnerships.
Marketing StrategyPoshmark’s marketing strategy includes digital advertising, social media marketing, influencer partnerships, and email marketing. The company promotes its platform through online ads, engaging content on social platforms, and collaborations with influencers and bloggers. Poshmark utilizes email marketing to communicate with users, showcase fashion items, and provide recommendations. Additionally, themed virtual parties and community engagement activities drive user participation and retention.Utilizes digital advertising, social media marketing, influencer partnerships, and email marketing to promote the platform. Showcases the platform through online ads and engaging social content. Collaborates with influencers and bloggers to reach a wider audience. Utilizes email marketing for user communication, fashion item showcases, and recommendations. Organizes themed virtual parties and community engagement activities to encourage user participation and retention. Focuses on building brand awareness and fostering community engagement.– Poshmark leverages various digital channels and influencer partnerships to expand its reach and promote the platform to a broader audience. – Collaborations with influencers and bloggers help create awareness and showcase the diversity of fashion items available on the platform. – Email marketing serves as a direct communication channel with users, keeping them informed about fashion trends and personalized recommendations. – Themed virtual parties and community engagement activities foster a sense of belonging and encourage user participation, contributing to platform retention. – The marketing strategy focuses on building brand awareness and fostering a strong sense of community engagement among users.
Organization StructurePoshmark operates with a structure that includes teams responsible for technology development, marketing, customer support, community management, and data analytics. The company emphasizes data-driven decision-making and personalization in its platform. Customer support teams assist users with inquiries and issues, fostering a positive user experience. Community management teams engage with users, organize events, and promote community interaction. Poshmark’s data analytics teams analyze user behavior and preferences to enhance platform features and recommendations.Employs a structure with specialized teams for technology development, marketing, customer support, community management, and data analytics. Emphasizes data-driven decision-making and personalization in platform development. Provides customer support for user inquiries and issue resolution, ensuring a positive experience. Engages with users through community management, event organization, and promotion of community interaction. Utilizes data analytics to analyze user behavior and preferences for platform enhancements and recommendations. Focuses on continuous improvement and user satisfaction.– Poshmark’s technology development teams focus on enhancing the platform through data-driven decision-making and personalization features. – Customer support teams play a critical role in ensuring a positive user experience by addressing inquiries and resolving issues promptly. – Community management teams engage with users, organize events, and promote community interaction to create a vibrant and engaging platform environment. – Data analytics teams analyze user behavior and preferences to continuously improve platform features and recommendations. – The company’s commitment to continuous improvement and user satisfaction is reflected in its organization structure and operational approach.
Competitive AdvantagePoshmark’s competitive advantage stems from its unique combination of a user-friendly marketplace, a vibrant social community, and a focus on sustainable fashion practices. The platform offers a seamless buying and selling experience, with features like sharing, following, and themed virtual parties fostering engagement. Poshmark’s diverse and engaged user base contributes to its position as a leading fashion marketplace. Additionally, the platform’s focus on sustainable fashion aligns with evolving consumer preferences. Revenue diversification through premium services and brand partnerships supports financial stability.Derives a competitive advantage from its blend of a user-friendly marketplace, a vibrant social community, and a focus on sustainable fashion. Offers a seamless buying and selling experience with features like sharing, following, and themed virtual parties. Maintains a diverse and engaged user base, positioning itself as a leading fashion marketplace. Aligns with evolving consumer preferences for sustainable fashion practices. Ensures financial stability through revenue diversification via premium services and brand partnerships. Stands out in the online fashion marketplace with its unique value proposition.– Poshmark’s user-friendly marketplace and social features create a seamless and engaging shopping experience, differentiating it in the online fashion marketplace. – A diverse and engaged user base contributes to Poshmark’s position as a leading platform for fashion enthusiasts. – The company’s focus on sustainable fashion practices resonates with consumers who prioritize eco-friendly and ethical shopping choices. – Revenue diversification through premium services and brand partnerships enhances financial stability and growth potential. – Poshmark’s unique value proposition and commitment to sustainability set it apart in the competitive online fashion marketplace.

Origin Story

Manish Chandra, Founder, and CEO of Poshmark explained how his childhood growing up in India, with the summers spent with his grandfather in a pharmaceutical shop in Chandni Chowk, a traditional market in Old Delhi, he learned what makes up a marketplace.

By observing people interacting, transacting, and negotiating, he learned what makes up a vibrant market.

In the decades following, e-commerce would become the primary mode of consumption, and Manish Chandra wondered if he could still make the whole online shopping experience social.

As he highlighted as the iPhone 4 launched, around the 2010s he realized how technology could be used to connect people, and enable them to share, while shopping.

From an engineering standpoint, Manish Chandra developed his own blueprint centered around a social, and sustainable experience, where technology would enhance both the value proposition for users and sellers on the platform.

After building his team, comprised of Tracy Sun, Gautam Golwala, and Chetan Pungaliya, in 2011, they launched Poshmark.

Market Opportunity

Poshmark’s opportunity sits across three markets and trends, which are all under the umbrella of retail.

As an online platform, driven by social commerce, selling primarily secondhand stuff, those three elements make up the market characteristics of Poshmark.

Value model

Poshmark value model moves along the lines of a shopping experience, improved by technology.

As a digital platform, Poshmark creates value for two types of individuals: users/customers and sellers.

On the one hand, Poshmark offers a discovery and purchase process primarily driven by a social experience.

As Poshmark highlights in its prospectus, perhaps in 2019, 87% of items purchased on the platform were preceded by a like, comment, or offer on its marketplace.

This discovery process is also user-generated, where users/buyers can curate their newsfeed with similar tastes and styles.

Poshmark’s marketplace provides a listing with millions of secondhand items.

Mission and vision and core values

Poshmark’s mission is “to put people at the heart of commerce, empowering everyone to thrive.”

Poshmark’s core values are:

  • Focus on People.
  • Lead with Love.
  • Grow Together.
  • Embrace Your Weirdness.

Value propositions and key stakeholders


Poshmark’s primary goal is to make “buying and selling simple, social, and fun.”

In the offline shopping experience, product discovery is inherently social.

Shoppers seek the same in the digital world and increasingly turn to one another for recommendations and validation online.

Social technology platforms take a central role in facilitating personal, meaningful interactions at scale through photos and discovery-based content.

Also, consumers increasingly favor resale shopping, fueled by the desire for sustainable consumption and increased orientation towards value.

From the seller’s perspective, people continue to find ways to pursue their passions with a digital “side-hustle” or digital entrepreneurs.

The growing demand for social shopping online creates a meaningful opportunity for sellers to expand their potential customer base from local to global, with the data-driven ability to reach, acquire, and retain buyers.

Value Prop for Buyers


Some of the claimed values for buyers comprise:

  • Social and fun mobile experiences and social actions are built into the platform. Interactions as likes, Posh Parties, and conversations, Poshmark tries to recreate a sort of real-world shopping experience.
  • Simple, personalized with a large variety of sellers.
  • Second-Hand item. Buyers on the platform can also find a vast assortment of secondhand items at a cheap price. For instance, in 2019 the average order value was $33.
Value Prop for Sellers


Sellers are critical for Poshmark, as the variety of items offered will make the platform more interesting to buyers and it will enable repeat buyers to get back to it over and over.

So Poshmark emphasizes its mission to “make selling a superpower.”

Poshmark takes a 20% fee on the final price, for sales of $15 and over, and a flat rate of F $2.95 for sales below that.

Some of the claimed value propositions for sellers comprise:

  • Easy and simple tools to build a digital business via Poshmark through listing, fulfillment, and customer support capabilities. Sellers can easily list their inventory in real-time and engage with buyers. Poshmark makes it a mission to enable anyone to sell, whether it is individuals that want to sell their used clothes, professional sellers, local boutiques, or other merchants.
  • Draw on a large mobile user base. Poshmark highlights how in 2019 its community engaged in 20.5 billion social interactions on its marketplace. So it combines social media capability and e-commerce. In addition, sellers can build their following on the platform and capitalize on it.

Technological model

Poshmark claimed proprietary technology leverages on a mobile marketplace, with built-in social media capabilities to enable as many interactions as possible. Indeed, many interactions on the platform become purchases with a higher degree of probability. Whether they are individuals trying to sell their used clothes or professionals and merchants, sellers can easily set up their mobile store and tap into millions of potential buyers. In addition, sellers can leverage Poshmark’s logistic services to handle their inventories (Image Source: Poshmark S-1)

Poshmark combines e-commerce, social media, inventory management, and sellers’ tools as means of growth.

Some of the key elements that make up the technological model claimed by Poshmark comprise:

  • Multi-Platform and API-first Design. Users can access the platform both via mobile (iOS and Android) and a responsive web app. The whole platform runs in the cloud with a set of APIs which are platform agnostic.
  • Social Platform managed via a social graph. Poshmark is a social media platform within an e-commerce platform. As such, it manages social graphs that store the myriad of connections across the millions of users on the platform.
  • eCommerce Engine that sellers can optimize listings and sales.
  • Real-time Platform. Features like Posh Parties allow tens of thousands of users to interact daily.
  • Big Data and Machine Learning used to process the tens of millions of interactions across buyers and sellers and used to personalize the experience across the platform.

Poshmark Storefront

Example of buyers and sellers users’ experience via Poshmark. As a social commerce mobile platform, sellers can share their listings with the community of buyers who can interact with it through likes and comments. Sellers can promote their listings through promotions and negotiations. And listings can have additional exposure through Posh Parties (Image Source: Poshmark Prospectus).
  • Listing. Sellers can easily create their own listings, that can get broadcasted to seller’s followers. Those same listings can be integrated with other social media like Facebook, Instagram, and Pinterest for further amplification.
  • Pricing. Sellers can set their own pricing strategy, by either setting dynamic pricing through the Make An Offer feature (it enables negotiations and offers from potential buyers), or targeted discounts via the Price Drop feature (buyers can offer discounts to users who have liked an item). For instance, in 2019, Make an Offer drove 70% of orders placed on Poshmark.
  • Wholesale. Sellers can purchase inventory in bulk via Posh Wholesale.

Poshmark Social Commerce Features

The four core social selling features on Poshmark: Posh Stories, Bundles, Drops Soon, and Reposh (Image Source: Poshmark Prospectus)

Social Marketing Services where sellers can promote their listings comprise:

  • Posh Stories, where sellers can showcase their listings via short videos and photos that disappear in 48 hours (a similar format to stories which we find on other social media platforms).
  • Bundles. Here Sellers can offer storewide seller discounts.
  • Drops Soon. A feature that enables sellers to pre-market items and notifies buyers when they are out.
  • Reposh. A one-click feature to resell items.

Poshmark Logistics And Payments

Logistics and Payment comprise shipping, payment, and authentication services.

  • Shipping. Posh Post offers sellers a fast shipping solution where buyers pay a flat fee to ship any USPS item.
  • Payment. Buyers are offered various payment methods, including credit cards and Posh Credits.
  • Authentication. Features like Posh Protect are used to guarantee buyers the quality of the received item, and other features like Posh Authenticate enable secure transactions.

Distribution Model

Poshmark is a peer-to-peer mobile social commerce platform that has two core players, buyers, and sellers. The experience on the platform is enhanced by buyers that can engage with other buyers. And at the same time engage with sellers, their listings, and offers – Image Source: Poshmark Prospectus.

Posh mark does not own or manage inventory, it, therefore, runs an asset-light model where Poshmark earns revenues based on a fee from each successful transaction.

Poshmark’s flywheel starts as users join the platform and start interacting, building communities just like on a social media platform.

That “attention” draws sellers that first offer their listings and then invest in widening them up, thus making the platform more interesting for users in the first place.

The interesting dynamic on Poshmark is that buyers can easily become sellers, as also individuals can sell their used clothes, with a strong secondhand marketplace.

And sellers can turn into buyers.

Growth Strategy

Poshmark growth strategy is skewed toward a few key objectives:

  • Growth of active users, as those users engage on the platform that becomes more valuable for the users joining (perhaps users leaving likes on listings also signal the quality of specific products/boards on the platform).
  • Growth in product variety.
  • Growth in engagement to drive transactions on the platform. Through data, Poshmark knows that the more engagement on the platform the more the sales and transactions taking place there. Therefore, the objective is to enhance engagement and discovery.
  • Expand Internationally. 
  • Expand the enterprise seller services.

Digital marketing strategy

Poshmark uses both organic and paid channels to grow its user base, and via virtual and in-person events.

Poshmark leverages social media channels, via organic, and paid campaign and influencer marketing. In addition, it has also been experimenting with TV and radio advertising.

Virtual community events are key marketing channels. Events like Posh Party Live, Posh N Sip, and PoshFest (an annual two-day conference) play a key role.

Financial & Revenue model

The Poshmark revenue model is quite straightforward, it takes a 20% fee on the final price, for sales of $15 and over, and a flat rate of $2.95 for sales below that.


Poshmark revenues are based on the value of items sold on the platform as it makes money when sellers have sold their listings.

Key takeaways

  • Poshmark is a social commerce platform that enables buyers and sellers to engage and interact easily. In that way, the transactions’ flow is ensured and Poshmark, which takes a cut on each transaction on the platform, makes its revenues.
  • Poshmark combines elements of e-commerce, social media, and machine learning/big data to enable engagement on the mobile-first e-commerce platform.
  • Its distribution model is given by the variety of items available on the platform. And at the same time, the fact that sellers can easily set up their e-commerce and build their community makes the platform appealing to sellers.

Poshmark: Key Takeaways

  • Overview: Poshmark is a social commerce mobile platform that combines e-commerce and social media to facilitate transactions. It focuses on creating a vibrant community where users buy and sell secondhand items.
  • Origin Story: Poshmark’s founder, Manish Chandra, drew inspiration from his childhood experiences in traditional markets. He aimed to recreate the social aspects of shopping online and launched Poshmark in 2011.
  • Market Opportunity: Poshmark operates at the intersection of three market trends: online platforms, social commerce, and the resale market. It enables users to buy and sell secondhand items in a social and engaging manner.
  • Value Model: Poshmark creates value for both buyers and sellers. Buyers enjoy a social discovery process, personalized newsfeeds, and a wide assortment of secondhand items. Sellers benefit from easy tools to set up digital stores, a large mobile user base, and exposure through social interactions.
  • Technological Model: Poshmark leverages proprietary technology to facilitate interactions on its mobile platform. It offers multi-platform access, a social platform managed via a social graph, eCommerce features, real-time interactions, and data-driven personalization.
  • Social Commerce Features: Poshmark integrates social commerce features like Posh Stories, Bundles, Drops Soon, and Reposh. These tools enhance buyer-seller interactions and engagement.
  • Logistics and Payments: Poshmark offers shipping, payment, and authentication services. Posh Post handles shipping, Posh Protect ensures item quality, and payment methods include credit cards and Posh Credits.
  • Distribution Model: Poshmark operates a peer-to-peer model where users engage with each other, building communities. It relies on the engagement of both buyers and sellers to drive transactions.
  • Growth Strategy: Poshmark’s growth strategy includes increasing active users, expanding product variety, driving engagement, international expansion, and growing enterprise seller services.
  • Financial & Revenue Model: Poshmark earns revenue by taking a 20% fee on sales of $15 and over and a flat rate of $2.95 for sales below that. Its revenue is directly tied to the value of items sold on the platform.

Read Also: Amazon Business Model.

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Poshmark Business Model

Poshmark is a social commerce mobile platform that combines social media capabilities with its e-commerce platform to enable transactions. It makes money with a simple model, where for each sale, Poshmark takes a 20% fee on the final price for sales of $15 and over and a flat rate of $2.95 for sales below that. Its gamification elements and the tools offered to sellers are critical to the company’s growth as a mobile-first platform.

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