People

Poshmark made ecommerce social. Wall Street is on board.

"When we go social, we're not going back," says co-founder Tracy Sun.

Poshmark made ecommerce social. Wall Street is on board.

Tracy Sun is Poshmark's co-founder and SVP of new markets.

Photo: Poshmark/Ken Jay

Investors were keen to buy into Poshmark's vision for the future of retail — one that is social, online and secondhand. The company's stock price more than doubled within a few minutes of its Nasdaq debut this morning, rising from $42 to $103.

Poshmark is anything but an overnight success. The California-based company, founded in 2011, has steadily attracted a community of 31.7 million active users to its marketplace for secondhand apparel, accessories, footwear, home and beauty products. In 2019, these users spent an average of 27 minutes per day on the platform, placing it in the same realm as some of the most popular social media services. This is likely why Poshmark points out in its S-1 that it isn't just an ecommerce platform, but a "social marketplace." Users can like, comment, share and follow other buyers and sellers on the platform.

For the first time since its founding, Poshmark turned a profit in its quarter that ended in June, and was again profitable the following quarter. It makes money by charging sellers a fee: 20% for items over $15, and $2.95 for everything else. And though Poshmark markets itself as a trusted source for luxury items (it provides free authentication for items over $500), the average order value in 2019 was just $33.

Co-founder and SVP of New Markets Tracy Sun spoke with Protocol soon after Poshmark's market debut. Sun discussed the importance of social commerce, why users are spending so much time on Poshmark, and how the company is investing for long-term growth.

The interview has been edited for clarity and brevity.

As you went through the IPO process, what were some common questions from investors?

The main questions we get from investors are about our social commerce marketplace and the magic behind it. Here's the thing: A lot of social networks are tacking on commerce, and a lot of commerce companies are tacking on social. Poshmark is different in that we built our business with social and commerce integrated from the very beginning. This means we are at the forefront of social commerce and this puts us in a leadership position.

Many people are aware that social commerce is a global phenomenon. So they really want to understand, "How does it work? Where is the momentum coming from? And why have we been able to get to where we are today?"

What's driving customers to spend those 27 minutes each day on Poshmark? Are customers treating it as a social experience, even if they have no immediate intention of buying?

Shopping, historically, has always been social. Hundreds of years ago, people wanted to talk to one another about the items they were buying. They wanted to know the people they were buying from. That's just inherent in us in shopping.

With the rise of ecommerce, all of that engagement and vibrancy that human beings have when they connect with one another got stripped out of shopping. What we see online is the photo of the product and price. What Poshmark does is put all of that vibrancy of social community connections back into shopping.

To your question of what people are doing on the platform: They are talking to one another; they are getting to know who they're buying from and selling to; they're getting inspiration; they're getting recommendations; they're asking questions about color, fit, sizing and everything else we're accustomed to asking in a social environment. And honestly, this is the way people are shopping today. Gen Z and the younger generations refuse to have one-way communication, they want to be involved, talk to their peers and socialize. So we've built this social marketplace in order to help enable that, and, as a result, help our buyers and sellers thrive.

There's a fairly large gap between your average selling price of $33 and the authentication threshold of $500. How does Poshmark build consumer trust for customers making purchases below $500?

Buyer and seller trust is extremely important to us. As you mentioned, we offer authentication services on certain items. There are also a lot of investments we're making — on the human, technology and program side — to protect our community.

We have machine learning in the background that helps strengthen the integrity of our marketplace. We have a community program where we enable anyone on our site to flag any listings that violate our politics, and our politics are very clearly stated on our site. We also have a team of people who are constantly monitoring listings.

Poshmark experienced a dip at the onset of the pandemic in March, but then performed really well in the subsequent months. How do you plan on retaining that momentum as the pandemic hopefully subsides?

There are three trends driving momentum in commerce: the shift online, the shift to social, and the shift to resale or secondhand. Over the past year, those trends that were already there have accelerated. Once we go online, we're not going back. When we go social, we're not going back. These trends are here to stay.

We see ourselves at the intersection of these trends and the leader at this intersection. We are focused on continuing to build long-term growth. So we started with women's products and added men's and kids'. Last year we added home goods, and most recently we launched beauty. We'll continue to add more categories so that our buyers and sellers can transact with more items, [and] international [expansion]. Then the last one is building enterprise-grade tools and services to support those sellers that are looking to move a high volume of inventory.

Policy

Musk’s texts reveal what tech’s most powerful people really want

From Jack Dorsey to Joe Rogan, Musk’s texts are chock-full of überpowerful people, bending a knee to Twitter’s once and (still maybe?) future king.

“Maybe Oprah would be interested in joining the Twitter board if my bid succeeds,” one text reads.

Photo illustration: Patrick Pleul/picture alliance via Getty Images; Protocol

Elon Musk’s text inbox is a rarefied space. It’s a place where tech’s wealthiest casually commit to spending billions of dollars with little more than a thumbs-up emoji and trade tips on how to rewrite the rules for how hundreds of millions of people around the world communicate.

Now, Musk’s ongoing legal battle with Twitter is giving the rest of us a fleeting glimpse into that world. The collection of Musk’s private texts that was made public this week is chock-full of tech power brokers. While the messages are meant to reveal something about Musk’s motivations — and they do — they also say a lot about how things get done and deals get made among some of the most powerful people in the world.

Keep Reading Show less
Issie Lapowsky

Issie Lapowsky ( @issielapowsky) is Protocol's chief correspondent, covering the intersection of technology, politics, and national affairs. She also oversees Protocol's fellowship program. Previously, she was a senior writer at Wired, where she covered the 2016 election and the Facebook beat in its aftermath. Prior to that, Issie worked as a staff writer for Inc. magazine, writing about small business and entrepreneurship. She has also worked as an on-air contributor for CBS News and taught a graduate-level course at New York University's Center for Publishing on how tech giants have affected publishing.

Sponsored Content

Great products are built on strong patents

Experts say robust intellectual property protection is essential to ensure the long-term R&D required to innovate and maintain America's technology leadership.

Every great tech product that you rely on each day, from the smartphone in your pocket to your music streaming service and navigational system in the car, shares one important thing: part of its innovative design is protected by intellectual property (IP) laws.

From 5G to artificial intelligence, IP protection offers a powerful incentive for researchers to create ground-breaking products, and governmental leaders say its protection is an essential part of maintaining US technology leadership. To quote Secretary of Commerce Gina Raimondo: "intellectual property protection is vital for American innovation and entrepreneurship.”

Keep Reading Show less
James Daly
James Daly has a deep knowledge of creating brand voice identity, including understanding various audiences and targeting messaging accordingly. He enjoys commissioning, editing, writing, and business development, particularly in launching new ventures and building passionate audiences. Daly has led teams large and small to multiple awards and quantifiable success through a strategy built on teamwork, passion, fact-checking, intelligence, analytics, and audience growth while meeting budget goals and production deadlines in fast-paced environments. Daly is the Editorial Director of 2030 Media and a contributor at Wired.
Fintech

Circle’s CEO: This is not the time to ‘go crazy’

Jeremy Allaire is leading the stablecoin powerhouse in a time of heightened regulation.

“It’s a complex environment. So every CEO and every board has to be a little bit cautious, because there’s a lot of uncertainty,” Circle CEO Jeremy Allaire told Protocol at Converge22.

Photo: Circle

Sitting solo on a San Francisco stage, Circle CEO Jeremy Allaire asked tennis superstar Serena Williams what it’s like to face “unrelenting skepticism.”

“What do you do when someone says you can’t do this?” Allaire asked the athlete turned VC, who was beaming into Circle’s Converge22 convention by video.

Keep Reading Show less
Benjamin Pimentel

Benjamin Pimentel ( @benpimentel) covers crypto and fintech from San Francisco. He has reported on many of the biggest tech stories over the past 20 years for the San Francisco Chronicle, Dow Jones MarketWatch and Business Insider, from the dot-com crash, the rise of cloud computing, social networking and AI to the impact of the Great Recession and the COVID crisis on Silicon Valley and beyond. He can be reached at bpimentel@protocol.com or via Google Voice at (925) 307-9342.

Enterprise

Is Salesforce still a growth company? Investors are skeptical

Salesforce is betting that customer data platform Genie and new Slack features can push the company to $50 billion in revenue by 2026. But investors are skeptical about the company’s ability to deliver.

Photo: Marlena Sloss/Bloomberg via Getty Images

Salesforce has long been enterprise tech’s golden child. The company said everything customers wanted to hear and did everything investors wanted to see: It produced robust, consistent growth from groundbreaking products combined with an aggressive M&A strategy and a cherished culture, all operating under the helm of a bombastic, but respected, CEO and team of well-coiffed executives.

Dreamforce is the embodiment of that success. Every year, alongside frustrating San Francisco residents, the over-the-top celebration serves as a battle cry to the enterprise software industry, reminding everyone that Marc Benioff’s mighty fiefdom is poised to expand even deeper into your corporate IT stack.

Keep Reading Show less
Joe Williams

Joe Williams is a writer-at-large at Protocol. He previously covered enterprise software for Protocol, Bloomberg and Business Insider. Joe can be reached at JoeWilliams@Protocol.com. To share information confidentially, he can also be contacted on a non-work device via Signal (+1-309-265-6120) or JPW53189@protonmail.com.

Policy

The US and EU are splitting on tech policy. That’s putting the web at risk.

A conversation with Cédric O, the former French minister of state for digital.

“With the difficulty of the U.S. in finding political agreement or political basis to legislate more, we are facing a risk of decoupling in the long term between the EU and the U.S.”

Photo: David Paul Morris/Bloomberg via Getty Images

Cédric O, France’s former minister of state for digital, has been an advocate of Europe’s approach to tech and at the forefront of the continent’s relations with U.S. giants. Protocol caught up with O last week at a conference in New York focusing on social media’s negative effects on society and the possibilities of blockchain-based protocols for alternative networks.

O said watching the U.S. lag in tech policy — even as some states pass their own measures and federal bills gain momentum — has made him worry about the EU and U.S. decoupling. While not as drastic as a disentangling of economic fortunes between the West and China, such a divergence, as O describes it, could still make it functionally impossible for companies to serve users on both sides of the Atlantic with the same product.

Keep Reading Show less
Ben Brody

Ben Brody (@ BenBrodyDC) is a senior reporter at Protocol focusing on how Congress, courts and agencies affect the online world we live in. He formerly covered tech policy and lobbying (including antitrust, Section 230 and privacy) at Bloomberg News, where he previously reported on the influence industry, government ethics and the 2016 presidential election. Before that, Ben covered business news at CNNMoney and AdAge, and all manner of stories in and around New York. He still loves appearing on the New York news radio he grew up with.

Latest Stories
Bulletins