Twice a month, Kristina wakes up early and commutes an hour and a half to a large Goodwill retail store outside of Minneapolis. Once she walks through the front doors, Kristina knows precisely where she is headed first: shoes. They are the easiest to examine for quality and value. Kristina then gravitates to denim and combs through each and every pair of jeans to examine brand, size, and style. “I sell what people call Bread and Butter items that flip for $15-$30, so when I’m sourcing, I’m looking to at least double my money,” says Kristina. From there, Kristina works her way through each section of the Goodwill, accumulating a stacked cart. When she is finished, five to six hours have been spent, at least 25 pieces have been gathered (though her record is 86 items secured in one haul), and she has spent at least $250 on the sourcing trip. With all of those criteria met, the sourcing trip can be considered a success.
Poshmark is the platform that Kristina works to source thrifted goods for to resell online to national buyers. Poshmark is an app that allows users to buy and sell new and used clothing. What differentiates Poshmark from resale competitors is the fact that Poshmark mandates that all buyers and sellers must create their own accounts with their own individualized sizes. There are also options to add photos of yourself and blurbs about the types of clothing and brands you purchase. From there, buyers and sellers can comment on each other's profiles, Like items, make their best offers on pieces, and communicate via comment back and forth with questions.
Poshmark has become the top dog in the online resale economy by creating a platform that has just the right cocktail of sociability that merges thrift shops and the sellers who are willing to dive into the endless sea of secondhand clothing. However, the underbelly of connecting buyers to sellers — the ultimate endgame in a retail economy schemed towards shopping predominantly online — is that Poshmark does not have to get its hands dirty in sourcing, evaluating, storing, or fulfilling the sale of the goods on their platform. The app markets itself as a side-hustle, particularly in a commercial where sellers claim they can pay for weddings, vacations, and cars from selling the old items in their own closets. The devil lies in the fine print at the bottom of the commercial: “Results may vary. Typical sellers sell around $500 in the first year.” The commercial and subsequent marketing veers towards the idea that sellers own and resell only their own personal goods. However, that is not the reality for full-time Poshmark sellers. It is sellers like Kristina who fund mass amounts of inventory in the Poshmark platform by scouting for items of value. These are the people who evaluate, touch, purchase, process, and market a mass amount of pieces that make their way through Poshmark to the final buyer. Poshmark’s marketing quietly veers away from acknowledging its role in the thrifting arena.
Prior to the COVID-19 pandemic, Kristina began using Poshmark to supplement her income as a full-time college student. After graduating and beginning to work as a full-time bartender, Kristina utilized selling on the app as a side-hustle. However, the side-hustle transitioned to full-time income when the pandemic beared down on the nation from her vantage point in a small Midwestern community in Minnesota. The main Poshmark sourcing change due to the pandemic boiled down to gaining access to inventory at the proper market cost. For Kristina’s Bread and Butter niche, any items over a $6 cost do not make sense to resell. “Sourcing became very difficult and you had to focus on online sourcing for inventory, which comes with a higher price point,” says Kristina.
Individual Poshmark sellers in the resale economy are not the only ones who have felt the economic heat during the pandemic. Dale Emanuel, the Public Relations Manager for Goodwill Industries of Columbia Willamette, can speak to the impact of the pandemic on donating and buying trends in the greater Portland area throughout 2020. “We are going from 92 donation sites to 48. We don't have the payroll to man the sites or truck donations throughout the territory,” says Emanuel.
Portland is a fascinating epicenter of the reselling industry because the region receives the third most donations from the public of any Goodwill territory across the United States. Part of the response to the historic influx of resale goods in Portland is precisely what Poshmark has been creating for the past few years, except on a regional level — the Goodwill system throughout Portland goes the extra step to find the perfect customer for a donated item. To use a donated high-end designer purse as an example, the purse is processed through a facility with employees who indicate what the price should be and evaluate whether the purse is a proper fit to land in one of Portland’s high-end Goodwill boutiques, which is another unique regional market differentiation. Goodwill employees then analyze which boutique the purse would have the best chance of selling in. “Every boutique absorbs the flavor of the neighborhood — one boutique’s district is boho and hippie, another has an active windsurfing community,” says Emanuel. In short, curation is based on community.
The Goodwill ecosystem in Portland can be simplified to three tiers for that high-end purse if it doesn’t sell after various rounds of markdowns: the boutique, the general retail store, and the outlet, otherwise known as the bins. The outlet takes unsold goods from the greater territory, organizes them by type, and hauls unsold merchandise to the sales floor in nine foot long rolling bins that are between 150-200 pounds for public purchasing. Items are sold by the pound or piece and only live on the floor for three hours. “Eighty to eighty five percent of shoppers at outlets are resellers,” says Emmanuel.
One major question that has surfaced with the rise of Poshmark is whether Goodwill is in competition with online resellers. Emanuel is of the opinion that when there are so many secondhand goods pulsing through the resale market, online competition doesn’t fundamentally matter. “We don't care if resellers are buying from our stores, we just want you to come back — it doesn't matter where you go,” says Emanuel.
After Kristina sources new materials across Minnesota for her Poshmark closet, she steams them, hangs them on a rack in her spare bedroom — which functions as her Poshmark office — photographs them with a professional kit, and begins to list her new items. The investment in her Poshmark venture has been about $2,000.
Kristina spends about $500 each month on sourcing new items for her closet and sells between $1,500 and $2,000 of goods each month after 30-40 hours of work per week spent processing goods. However, separating Poshmark from the rest of her life has been a challenge. “The amount of time I spend selling on Poshmark is a hard number to quantify. It’s an app on my phone. I’m always pulling out my phone to answer questions or respond to offers from buyers,” says Kristina.
On January 14th 2021, Poshmark went public and catapulted from the initial share price of $32-$35 to $101.50 by the end of the day, a 142% fluctuation in value. The interest in Poshmark has been brewing for quite a long time considering that active users spend an average of 27 minutes per day on the platform.
Menlo Venture’s Venky Ganesan, one of the initial investors in Poshmark, sounded off on this reality with Crunchbase News right after Poshmark debuted with their IPO: “Poshmark is unique in that it carries new inventory all the time, and it doesn’t have to touch anything.” That is correct — Poshmark does not touch any new inventory that is loaded onto the app, yet that is where an immense amount of labor in the reselling economy lies. There are monumental costs for Poshmark sellers in sourcing and processing expunged goods from the public consciousness as well as costs from the institutional entities, like Goodwill Industries, who intake the initial influx of unwanted goods. This presents a question: do Poshmark leaders, and the public at large, understand how much labor it takes for a product sourced and resold from a thrift store to reach the final hands of a buyer?
At the end of the day, as Poshmark rises in stature and funding from a successful public market debut, it will become evident that the platform needs to acknowledge that the secondhand clothing ecosystem and individual sellers are the ones creating the brunt of the value on the platform. Fundamentally, Poshmark’s success proves that the cultural tide of consumerism is changing across the United States when it comes to the social acceptance of secondhand clothing. Kristina is particularly struck by this shift in attitude. “Thrifting has now gotten popular to the point that it’s common to have secondhand items in your closet. That’s not something to feel weird about anymore.”
About the Data:
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