This is the million dollar question for a reseller isn’t it?? Should I or shouldn’t I pay up for my inventory? My answer for you is this: yes, you should and no, you shouldn’t. I know, I know…I’m providing you with some conflicting information. But let me explain: I think that you should pay up for inventory if you will make a good profit on the item but I also think that you shouldn’t pay up for inventory just because you like something. Let’s dive into this a little bit deeper…
When Should I Pay Up for My Inventory?
First, let me start off by explaining what I mean by “paying up for inventory.” This phrase refers to spending more than you would normally pay for an item when sourcing (buying inventory for your Poshmark closet). Now that we’ve established that, let’s take a look at the question, ‘When Should I Pay Up for My Inventory?’
Short Answer: Only if will make you a sizable profit.
Long Answer: Personally, I would only pay up for inventory if I knew for absolute certain that I can at a minimum double if not triple my initial investment. Why? Because first and foremost, I want to ensure that I will make my money back, especially if I paid a lot of money for the item. Second, I need to ensure that I am making a profit on the item. To me, it doesn’t make sense to pay more for item if I’m not sure if I will make the money back.
When deciding whether or not to take the plunge, I spend a LOT of time looking at comps to ensure that it is really worth it. And if it isn’t in high demand or isn’t selling on the app for at least double what I am about to pay for it then I generally won’t pick it up because to me, it is not worth my time and energy. Which leads me into…
When Should I NOT Pay Up for Inventory?
I would never pay up for inventory because it is appears to be a “good deal” or is cute to me. When running a business, decisions need to be made objectively especially when it comes to your inventory. If your Poshmark closet consists of items from your own personal closet that you are looking to clear out then absolutely go for it! But if you are looking to create a business out of Poshmark, then you need to make informed business decisions. Just because an item is cute to you or is a “good deal” DOES NOT mean that it is going to sell. Poor business decisions could result in more money lost than gained in the long haul.
Let’s take a look at an example: Take a peek at the J Crew Wool Coat lying on my bed in the above picture…
When I purchased this item, I definitely paid up for it (aka paid more money than I normally would for a coat). Why? Because when I looked it up on Poshmark, I learned that there was only one other person selling the coat on the app and it was in a different size.
Theoretically, I would be the only one selling the item on the app in my size and that would ultimately give me control of the price. Therefore, in this case, it 100% made sense for me to buy the item to sell on the app!
I hope that you found this post helpful!
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Baci,
Bianca Ida
