Second-hand clothing marketplace Poshmark, accessories, and décor plan to go public on the Nasdaq, Bloomberg reports. Experts say the transition from a private to a public company will be smooth. This decision is because the company’s shares rose to 6.6 million shares than initially planned.
Initially, the company hoped to raise from 35 to 39 million dollars for shares, but the demand turned out to be higher than expected. As a result, the share price was $ 42, which means that it is valued at $ 3.5 billion on a fully diluted basis.
Poshmark has many opportunities
During the company’s existence, the marketplace has attracted more than 70 million users, who have sold more than 130 million products through the platform. Poshmark makes money from commissions from peer-to-peer sales and merchandise it sells in bulk, and it became profitable for the first time last year. According to company reports, it generated $ 21 million in net income in 2020 from $ 193 million in revenue. In 2019 the company ended the reporting period with a net loss of $ 34 million on revenue of $ 150 million.
One of Poshmark’s improvement reasons was the pandemic; while supply disruptions or business interruptions plagued many businesses, the company improved the ability to deal between buyers and sellers.
Other similar platforms show growth in times of crisis, as the resale of things is more accessible to users than buying new ones. In addition to this, there is a growing trend towards rational consumption of goods and environmental friendliness. Buying other people’s things that have never been used or used rarely is more environmentally friendly than buying clothes in the mass market.
Even though the company was quite successful in 2020, it still has a lot to work on to improve customer service quality. If you check the review websites, you’ll find that the company consistently gets bad marks for its quality control and support services.
Poshmark still has many challenges ahead to prove its uniqueness to public market investors and explain the differences from already publicly traded competitors such as eBay and The RealReal, which went public in 2019 and whose current market capitalization is approximately $ 2.3 billion. It is also essential to think over a strategy for developing and implementing new services because competitors are not asleep. ThredUp, for example, filed a confidential SEC filing for an IPO last fall around the same time as Poshmark.
You may wonder: Is it possible to build a successful website like Poshmark?
Our answer is yes, it is quite possible. It is vital to have a detailed plan if you want to build a thriving marketplace like Poshmark. Here are some helpful tips to help you create your app.
Create positive customer experiences
It is essential for businesses nowadays to provide a positive customer experience. It allows you to get new customers for free through recommendations and increase sales through loyalty.
Poshmark provides fast delivery via PoshPost (in collaboration with USPS). PoshPost requires no stamps or hassle. When people buy goods, Poshmark offers a prepaid address label that can be pasted onto a box. Once the purchase has been packaged, the seller can send it to a USPS mailbox or even pick it up from home for free!
Build a community
Poshmark’s key feature is its vast community. It’s not just about fashion e-commerce, but a community where people can connect and share their fashion choices and preferences.
The platform hosts swanky parties, and these shopping events allow people to meet on the Poshmark app to buy, trade and sell clothes and accessories.
Community building and events are great tools to engage with your customers. Let’s take a look at how Poshmark benefits from being socially active.
Protect users from scammers
Copies of well-known brands’ products that disguise themselves as the original are among the main problems of Internet marketplaces. Poshmark addresses this issue by not issuing payment until the buyer confirms that they received an order that matches the description. Buyers have three days to return the product to the seller to distort information about the product. If no claims are received within three days after delivery, payment is automatically sent to the seller.