Poshmark Rethinks New Fee Structure Split Between Sellers & Buyers After Only 2 Weeks
UPDATE 10-21-24
Poshmark is reverting to the original fee structure as CEO Manish Chandra admits the site saw decline in sales due to new fees and issues an apology for the disruption.
Liz Morton
UPDATE 10-20-24
Poshmark CEO Manish Chandra met with some Posh community leaders today to give a preview of changes to the new fee structure that will be announced tomorrow, according to ErynnTheReseller on Instagram.
Just two weeks after announcing a major shakeup in fee structure, Poshmark is sending cryptic messages to users saying they've heard the feedback and are working on updates to the policy to "better meet your needs" - will they revert back to full seller fees or something else?
Poshmark announced the change on October 2nd, moving from the previous 20% selling fee to a split model where both seller and buyer pay a percentage plus a flat amount based on the total sale price.
Liz Morton
What’s Changing?
We are reducing our 20% fee in the US, replacing it with a 5.99% Seller Fee, a 5.99% Buyer Protection Fee, and a “1-2-3” structure, where both sellers and buyers will pay $1, $2, or $3, depending on the item or bundle sale price.
But it didn't take long for users to start doing the math and calling out that the new fee structure would actually mean Poshmark would be collecting more fees total for items under ~$90.
Liz Morton
Backlash has ensued from both sides of the marketplace, with buyers especially upset about the lack of transparency and the fact that Poshmark is lumping the buyer protection fee in with the sales tax amount at checkout - only showing the breakdown if you click on the little i in a circle info popup icon.
I said at the time that decision could prove to be a costly mistake for Poshmark as many state tax laws specifically say tax must be stated separately from other charges and regulatory powers like the FTC and various state Attorney General's are increasingly cracking down on junk fees and misleading business practices.
Today, some users are reporting they are seeing messages from Poshmark indicating they are rethinking the new fee structure and will be announcing an update "soon."
Marketplace Fee Update
We want to take a moment to thank you for your valuable feedback regarding our recent fee changes. We hear your concerns and are actively reevaluating these updates to ensure they align with your needs and expectations.
Your input is crucial in shaping our platform, and we are committed to making adjustments that enhance your experience. We appreciate your patience as we work through this process and will keep you updated on our progress.
Poshmark has not provided any other details at this time, but sellers are discussing the notice on Reddit.
I find it funny that it’s just text when you click, but if you click any other of the banners, Poshmark makes it look pretty and on E-flyers. The information kind of feels forced and pushed out very fast. Damage control, maybe?
Oh they must have seen a dramatic decrease in sales then.
Some commenters are encouraging others to file FTC complaints about the fees and providing links and a template to make the process as easy as possible for those who've never done so before.
Lol. I knew this would happen. They won't reverse course but they'll make some minor changes and make buyer fees more visible.
Keep on reporting their bad business practices at:
It's not just for fraud.... it's for reporting fraud, scams, and bad business practices. I just finished reporting their new policy of making buyers pay for items that were lost by usps, order cancelled.... package shows "delivered" months later.... which is flat out illegal.
Keep on reporting them. It just takes minutes.... there may not be much we can do as individuals but we can try to get it seen by agencies that do have power....
That plus the quick about face and rushed nature of the communications points to Poshmark being in Cover Your Ass(ets) mode on the legal front and I expect at the very least, the changes they announce will include more transparency about the buyer fee and splitting it out separately from sales tax without making the buyer take any additional action or clicks to see it.
But it's always possible they could make more dramatic changes, including scrapping the whole thing completely and going back to the old fee structure.
It could also be that Poshmark is reacting to recent moves by Mercari that reveal significant buyer fee aversion leading to ongoing and persistent cart abandonment and lost sales.
Mercari is now 6 months into their experiment with shifting the fee burden to buyers with disastrous results for GMV growth and buyer retention, so they are now testing adding the buyer fee back into the item price to show one total amount up front with shipping and tax calculated at checkout - just like it used to be when sellers paid the fees.
Liz Morton
That all seems like a lot of extra work for the programmers, not to mention added stress and friction in the user experience, just to ultimately end up at about the same place they started with only minor differences in when/how they take their cut of the pie.
It appears Poshmark is now speed running their own version of this social experiment that anyone who knows anything about consumer psychology could have easily predicted, so it will be interesting to see if they land in the same place of adding the buyer fee back in to the item price to try to make it more palatable.
Will marketplaces that have gone this route be able to recover lost user trust and goodwill even if they do reverse course on their policies?
eBay also recently announced they plan to introduce buyer fees in the UK in 2025 - it will be interesting to see if they learn anything from their competitors' failures and tweak how they plan to implement the fees or possibly abandoned the idea all together before it rolls out.
Poshmark has not responded to request for comment at time of publishing.
Stay tuned for updates and let us know in the comments below what change you hope Poshmark will make to the new fee structure!
