MF 402 : Poshmark update: Match Buyer's Last Offer ("boomerang")
Updated: Nov 30, 2022
Today, I cover Poshmark's new "match buyer's last offer" feature or what I call the "boomerang." I also talk a little about Poshmark's recently announced acquisition by Naver and what that may mean with respect to future developments. More at www.bemovingforward.com.
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Poshmark under new ownership
Recently, Poshmark announced that it was acquired by Naver, a South Korean ecommerce conglomerate for a $1.2B all cash deal. While I don't typically cover the macro level goings on at the company, once in a while it's important to look at these larger developments to understand implications for sellers (as well as buyers) on the platform.
The first major implication is that Poshmark (symbol POSH) will no longer be a publicly traded company. Poshmark only went public in January 2021, and with the acquisition, it will revert back to a private company, albeit under new ownership. As someone who once worked for a company that was acquired by a publicly traded organization that continued to buy smaller entities, I can say that cultures inside the org will change. Currently, it appears that Poshmark as a business unit will continue to run independently with the same leadership intact. The difference is that it will now be answerable to, and have the backing of, a much larger entity. Inevitably, there will be corporate culture changes, both in being acquired by another company and in transitioning back to a privately held entity. This will trickle down to how decisions, innovations, and investments are made within the company.
It's difficult to predict exactly what this larger 10,000 foot view change will mean for sellers and buyers. However, I predict two long term developments. This is purely speculation on my part as of the time of this episode's recording:
Further expansion into international markets: As I've talked about on the podcast and as I cover in my book, Poshmark has been entering new regions, including Canada, Australia, and most recently India. With Naver being a major ecommerce company based in Korea, it stands to reason that they would want to continue expanding into new markets. An interesting question for Poshmark sellers is whether we will see any cross-border access to these new markets. Currently, Poshmark sellers can only sell to customers within their home country. Likewise, Poshmark buyers can only purchase from sellers within their country. A Poshmark Canada buyer cannot, at this time, buy from a Poshmark US seller and vice versa. It will be interesting to see whether individual sellers will eventually be able to access overseas buyers markets; in essence turning them into micro global businesses. There are major logistical challenges, notably with shipping, that make this tricky but if Poshmark under Naver can navigate those, the growth potential could be significant.
Further expansion into new product markets: When we started on Poshmark, it was exclusively geared towards clothing. Today, there are several new categories, including home goods, pet goods, and more recently, electronic items. I imagine we will see this growth continue with expansion into new product categories. Personally, I would love to see Poshmark think outside the box and enter digital product categories such as graphics, logos, and other e-artwork buckets that are offered on marketplaces like Etsy. Additionally, there are soup-to-nuts products Poshmark could expand into such as print-on-demand apparel that you see on on e-commerce marketplaces like Amazon's "Merch on Demand" service.
Time will tell exactly how this big change in company ownership will impact and drive innovations in the future. I'm as curious as anyone else on the platform and will keep you posted as things develop.
Poshmark update: Match Buyer's Last Offer ("boomerang")
Now, let's turn our attention from the macro to the micro. This week, we continue taking a look at updates to the Poshmark platform for sellers. Along with "select all," which I covered last week , Poshmark has added a new negotiating option: "match buyer's last offer" or what I call the "boomerang."
As I've talked about extensively on the podcast and in my book, Poshmark is a true marketplace. Sellers list items for sale, whether at the original price or for a discount. Buyers have the option to purchase it outright but will more commonly tender an offer that is below the list price. For more on negotiating on Poshmark, check out episode 213 and my book.
Once a seller receives an offer, they can accept, decline or counter. With a counter offer, sellers can offer a discount from the list price (and / or add a shipping discount: see episode 334 for more on this) while going above the initial buy offer.
To illustrate, say I list an item for $100. A buyer comes in with a $20 offer. I can counter for say $80. The buyer then has 24 hours to mull over the new offer. They can accept, decline, or counter the counter offer.
Now, with "match buyer's last offer," seller's can override their pending counter offer (assuming the buyer hasn't acted on it yet) and send a new one that matches the buyer's last offer. This is why I call it a "boomerang" since you're throwing back the buyer's last bid. In the case of our example, if I counter the $20 with $80, and the buyer hasn't acted on it yet (accepted, declined, or countered), I can match the last offer and send a new counter offer that matches the last offer: in this case $20. The buyer then has 24 hours to decide whether to accept, counter, or decline. The idea behind this feature is to give sellers more flexibility to close sales. However, I don't think this is a feature you should be using often. Let me illustrate below.
Get comfortable with being uncomfortable
When you're selling for the first time on Poshmark, it can be a little confusing, if not daunting to negotiate, especially if you're not accustomed to it. As I shared on episode 213, a friend of mine who started out on Poshmark listed an expensive name brand purse. She received an offer that she felt was a little too low but accepted it anyway and later felt seller's remorse. When I asked her why she accepted, she explained that she was worried she would never get another offer. She was conflicted.
When selling for the first time, whether on Poshmark, in person, or elsewhere, there's a strong psychological pull you'll experience the first time you get an offer, no matter the amount. As I explain in my book, it's important to recognize and respect this. However, if an offer is too low, you should feel comfortable declining or countering.
Negotiating is part art, part science
As I explain on today's episode, negotiating is trying to reconcile two competing, sometimes conflicting interests between buyer and seller. A seller wants to maximize their sale price while a buyer wants to get the best deal possible. Sometimes, there's no middle ground between the two and a seller (or buyer) should just feel free to decline and walk away. However, there is often a middle ground, in which both sides can compromise to reach a mutually satisfactory price. I refer to this as the "zone of agreement" (ZOA). Outside of that, there are upper bounds and lower bounds that sellers can use a guideposts. For more on this, check out episode 213 and my book.
If you're a new seller, you may experience several levels of FOMO or fear of missing out. On the one hand, if you decline or counter an offer, you risk that person walking away and losing out on the sale. On the other, if you accept an offer that's too low, you may give up too much. This is why I recommend that you approach negotiations strategically rather than rely on your emotions, which can be erratic and result in rash decisions. Instead, sellers should establish guideposts for negotiating on Poshmark and refer back to these in deciding to accept, decline or counter.
For new sellers, I recommend writing down the upper bounds, lower bounds and guideposts for the ZOA in between for listings. Keep these to yourself, they're meant for you and you alone to refer back to when negotiating. Don't share them but refer back to them when encountering offers. If an offer is way too low, decline and move on. If an offer is a little on the low side but high enough that it can potentially move into the ZOA, counter and nudge it higher. Regardless of the outcome, you should establish and use guidelines to negotiate with confidence and certainty. We've had many occasions in which an offer came in too low, which we declined. Sometimes we would get new offers right away that were much better, while other times we have to wait weeks, months, or even a year to get another offer. When you negotiate strategically and methodically, you will have something more concrete and reliable than your mercurial feelings to use as a compass.
Now, getting back to "match buyer's last offer." If you're negotiating based on guidelines that you've thought out, then IMHO you shouldn't be using this feature very often. If your guidelines tell you an offer is too low, don't accept it. Decline or negotiate. Once you counter, so long as it's based on a strategy, there's little reason for you to go back and try to take the buyer's last offer. Worse, you may open yourself up to the buyer continuing to lowball you on the price with an even lower counter if they suspect you're desperate. Thus, my first and strongest recommendation is to focus on building your negotiating muscles. This will lead to much better outcomes in long run.
Two narrow exceptions
That said, there are two occasions in which I think the "boomerang" may be useful.
If a buyer's last offer is within the ZOA but on the lower end and you've extended a counter to get it more centered, you may want to use the boomerang if you're being too hard in the negotiation. This might be the case if you've had the item listed for a while, if it's older, or if you get caught up in negotiating frenzy and the difference in minimal. As mentioned, negotiating is part art, part science. Even the best of us can sometimes get caught up in the process and lose sight of the fact that we're trying to close a sale. Thus, if the last offer is decent enough (i.e. within the ZOA), and you've been going back and forth for a while, you may want to boomerang the buyer's last offer as a show of good faith to close the deal.
If your circumstances change, then boomeranging a last offer, even if it's too low, may be a good way to close quickly according to your new priorities. Going to back to our example. Let's say you get a $40 offer on a $100 listing. Based on your bounds and ZOA analysis, you send a counter offer for $80, which is more in line with a ZOA price. Soon after, you get a new job offer that requires you to move or you discover this particular item is on clearance at stores due to being oversupply. Then, it might be worth boomeranging the $40 offer to get rid of that item since your priorities have changed. Technically, you can think of this as recalibrating your bounds and ZOA based on new circumstances and information.
Short of these two circumstances, the "boomerang" is not a feature you should need to use often if you're approaching pricing and negotiating strategically and methodically. Thus, I would categorize this as a "a nice to have" rather than "a must have" feature.
For more on pricing, negotiating, and winning Poshmark strategies check out my book: The Poshmark Guide for Individuals and Small Businesses.
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