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How Does Poshmark Make Money (Business and Revenue Model)

The Poshmark business model

How Does Poshmark Make Money?
Here’s what you should know:
  • What is Poshmark, and how does Poshmark work?
  • How does Poshmark make money?
  • Seller Fees (Commission)
  • Shipping Label Fees
  • Poshmark’s profit and revenue
  • What is the Poshmark business and revenue model?
  • Poshmark’s funding and valuation

How does Poshmark make money? Here is a full, in-depth, breakdown of their two (2) revenue streams and the different products and services they offer, as well as the Poshmark business model, their year-over-year revenue, and how Poshmark works.

What is Poshmark, and how does Poshmark work?

Poshmark is an online marketplace app for buying and selling new and secondhand clothing, shoes, accessories, and more.

How Poshmark works is: Once a user creates an account, they can then buy or sell items on the marketplace.

Founded in 2011 by Manish Chandra, Poshmark, to date, has now had over 100 million orders placed on the platform since its inception. To add to that, Poshmark also has over 60 million users on its app with a valuation of $3 billion.

Some of Poshmark’s competitors include EtsyOfferUp, DepopVinted, Mercari, Facebook Marketplace, eBay, Amazon, and other marketplace apps.

Poshmark App in Apple App Store | Poshmark Business Model | How Does Poshmark Make Money?
Source: Apple App Store

How does Poshmark make money?

Some of Poshmark’s statistics include over 8 million sellers and 60 million users on the Poshmark marketplace. As well as 75 million active listings and over $1.4 billion of Gross Merchandise Value (GMV).

So how does Poshmark make money off of all the seller and gross transaction volume on their platform?

Below is a breakdown of how much money Poshmark makes and its revenue model. Including their main revenue stream and how much they charge for their services.

Here are the 2 ways of how Poshmark makes money (in 2021):

Poshmark has a revenue model that makes money in two (2) ways.

#1. Seller Fees (Commission)

Poshmark makes the bulk of its money through sales commissions. In 2020, over $1.4 billion of Gross Merchandise Value (GMV) was transacted on the Poshmark marketplace, of which they collect a commission on each sale.

The way it works is: Every time an item sells on the Poshmark marketplace, Poshmark will receive a commission on each sale.

How much Poshmark takes depends on the sales price of the item. But note, seller fees remain the same for all of Poshmark’s sellers’ services like Posh Wholesale, Bundles, Drop Soon, and Reposh.

Poshmark Commission Fees:

  • Sales under $15: flat commission of $2.95
  • Sales $15 or more: 20% commission

Note: Poshmark handled over $1.4 billion of Gross Merchandise Value (GMV) in 2020, of which they collect a commission on each sale.

#2. Shipping Label Fees

Poshmark made an additional $8 million, or 3% of their total net revenue in 2020 from shipping label fees.

How does Poshmark make money from shipping labels? Well, Poshmark acts as an agent for the United States Postal Service, or USPS, by purchasing a shipping label on behalf of the seller after the buyer has already paid. Poshmark then keeps the difference between the shipping fee paid by the buyer and the cost of shipping labels paid to the shipping provider as revenue.

Note: 3% of Poshmark’s total net revenue came from shipping label fees in 2020.

Poshmark’s profit and revenue

In 2020, Poshmark made $262 million in revenue.

Note: Because Poshmark Inc is a publicly traded company, under the Securities Exchange Act of 1934, they must file continuous financial filings with the U.S. Securities and Exchange Commission (SEC). You can find all of Poshmark’s publicly released financial reports, including annual reports, through Poshmark’s investor section on their website.

What is the Poshmark business and revenue model?

Poshmark makes money through a few revenue models that they combine within their company, they are:

  • Commission based business model

Poshmark’s funding and valuation

According to Poshmark’s Crunchbase profile, Poshmark raised $153 million over 7 rounds with a valuation of $3 billion.