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The most popular question I see within the Poshmark community is:
“How do I price [insert garment here]?”
If you’re a cheater pants, scroll to the bottom of this post for my personal formula. Otherwise, I’ll try to keep it short and sweet.
Here are the 6 most important elements to consider while pricing:
1. Be confident.
You are not obligated to cut anyone a deal. Your family, friends, and your sister’s brother-in-law’s neighbor’s daughter can forget about it!
Consider the hours you put into listing a single garment. The recipe for a quality listing is endless hours of sourcing, measuring, photographing, and much more.
You are running a business.
Most people don’t understand the elbow grease behind a single listing, not to mention an entire Closet! Have confidence in your work and don’t undermine yourself.
You rock, girl.
2. Consider your costs.
It may sound like a ‘no-duh,’ but consider your initial inventory cost. Again, recognize the time you invest.
There are multiple variables to acknowledge before pricing.
However, this post isn’t about finances, so I recommend you utilize Kreithchele’s online accounting course. (This link gives you a $100 discount!) Pair it with my free inventory and sales spreadsheet for a full understanding of your costs.
3. Understand resale value.
As you may know, brands like Anthropologie and Free People are extremely saturated markets in the resale world.
A saturated market is a situation where everyone already has the product.
When sellers realize a specific brand is readily available around every corner, they begin to lower their prices to give them an upper-hand among the competition.
As more and more sellers do this, the resale value decreases. (Note: this may not apply to limited edition pieces or specialty lines.)
I suggest one of two things:
1. The easy route.
Don’t sell anything within a saturated market! Pricing garments for cheap isn’t a marketing strategy. It’s desperation.
Realize some buyers may perceive products with a low price as a good deal while others sense a bargain means cheap quality.
I’d guess you want to attract customers like the latter anyway. (More on that in a bit.)
2. Price responsibly.
Explore ways to stand out among these markets without lowering your rates. Scroll through a brand search on Poshmark and notice what items jump out at you.
I’m going to guess those listings are more unique garments and photographed beautifully.
So, opt for sourcing more interesting clothing and put the solid v-neck back on the rack. 😉 Then, brush up on your cover photo skills and descriptions.
4. Recognize your desired audience.
A study in the Journal of Consumer Research explores the “naive theory.” Long story short, consumers fill in the gaps of what they don’t know about a product.
We insert our naive theories to help us decide whether a low priced item is junk or a bargain! Luckily, you’re able to target which customer you want.
If you are a quick flipper and sell ‘fast-fashion’ brands like Forever21 or H&M, your audience connects low prices with great deals. She is likely a teenager or young adult.
Personally, my ideal shopper associates a very low price with cheap quality. My rates are slightly higher to attract her. She is probably in her late 20’s-early 40’s.
Choose your clientele and price accordingly.
5. The magic numbers 4 and 9.
If you subscribe to my newsletter, you may recall discussing this topic last week. I’ll reiterate, but I encourage you to sign up to be in the know!
Think of it like this: your potential buyer always considers her $6 shipping cost on Poshmark. It’ll be in the back of her head to add $6 to whatever she’s interested in purchasing.
By ending our asking prices with 4 or 9, we are setting her up with a nice multiple of 5.
4 + 6 = 10
9 + 6 = 15
Psychological studies show people like rounded numbers, perhaps because we’re accustomed to using the decimal system and rounding numbers to the nearest multiple of 5 or 10.
Either way, you will notice an increase of listing engagement.
6. Finally, my general pricing rule.
Poshmark encourages buyers to sell NWT (new with tag) items for 40% off retail price and everything else 60%, given it’s in excellent condition.
These are generous percentages for final sales, but we need to weigh in realities like bundling discounts, price drops, offers, and more.
I begin NWT listings at 30% off retail, and everything else at 40% off.
These initial percentages seem shallow, but they allow me to offer a generous bundle discount and accept a variety of offers. On average, I offer 67% off original retail prices. This includes NWT items.
…it’s up to you.
I encourage you to be kind to yourself. Respect your hard work and understand your customers. Keep your price range consistent, and you’ll become accustomed to pricing in no time.