Poshmark Jumps On Fee Splitting Bandwagon, Shifting Some Fees To Buyers
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 10-16-24
Just two weeks after announcing a major shakeup in fee structure, Poshmark is rethinking the move, saying they've heard 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?
Liz Morton
Poshmark is the latest marketplace to shake up their fee structure, announcing some fees will be shifting to buyers on the US marketplace effective October 3.
The new fee structure was announced today in a company blog post:
Poshmark
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.For sellers, this allows you to keep a larger share of your earnings with every sale and gives you the flexibility to sell a wider variety of items, no matter the price. For buyers, this demonstrates our continued commitment to ensuring you will be protected every time you purchase on Poshmark. Transparency is critical to our marketplace, which is why any costs related to buying and selling on Poshmark are clear and upfront.
We’re making these changes to bring more value to both our sellers and buyers.
For Sellers:
- Earn More with Every Sale: Receive more payout from your earnings with lower fees.
- Simple and Transparent: Zero payment processing fees makes selling easier and more straightforward.
For Buyers:
- Shop Confidently: Enjoy peace of mind knowing every purchase is protected.
Seller FAQs
When does the new fee structure go into effect?
The new fee structure will be live starting October 3, 2024. From this date, all listings—both new and existing—will automatically transition to the new fee structure. You don’t need to take any action. Please note,this update applies to the US market only.Do I need to do anything to update my listings?
Nope! The new fee structure will automatically apply to all existing and future listings as of October 3. You can continue selling and shopping as usual, knowing that the new structure is in place to make your experience even better.What does the Seller Fee cover?
The Seller Fee covers credit card processing fees, a Posh Post shipping label, external advertising costs on 3rd party platforms, and 24/7 customer support for every sale. For more information, please see our Seller Policy.Where can I see the Seller Fee total for my listing?
Once your item sells, the exact Seller Fee will be included in the sale order confirmation email.Does wholesale follow the same fee structure?
At this time, the new fee structure applies to all regular listings. For wholesale, please reach out to our support team for more details.
Important Note: the new fee percentages are now applied on the total sale price, including shipping and sales tax.
That makes it impossible for sellers to get an accurate picture of the exact amount in fees, as there is no way to know ahead of time where an eventual buyer will be located and how much the tax amount will be.
eBay has done the same since 2021, much to the frustration of sellers.
Buyer FAQs
What does the Buyer Protection Fee cover?
The Buyer Protection Fee is a part of the new fee structure that applies to every purchase made on Poshmark. It covers services like Posh Protect(which guarantees a refund if the item isn’t as described or doesn’t arrive),Posh Authenticate(for qualifying items), 24/7 customer support on every order, and ongoing product improvements.This fee is standard across many online marketplaces to ensure buyer safety and trust.
Where can I see the Buyer Protection Fee total for my order?
The Buyer Protection Fee is displayed during the checkout process before completing your purchase. You will also see it on your order confirmation page and email.How is the total order price calculated?
The total order price includes item or bundle price, applicable sales tax, and shipping.
When asked about how Poshmark will handle fee transparency for buyers, a spokesperson provided screenshots of what the checkout experience will look like.
The decision to combine the new Buyer Protection fee and sales tax in the main checkout view, only showing the breakdown if/when the buyer clicks the little i in a circle for more information, 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 are increasingly cracking down on junk fees and misleading business practices.
Posh Pass
Poshmark will also be piloting a beta program called Posh Pass, giving dedicated sellers a way to grow their businesses by offering buyers discounted shipping on their purchases.
Buyers purchasing from Posh Pass sellers automatically receive discounted shipping of $5.95 at checkout on all orders.
Posh Pass sellers will have increased visibility to help drive sales, with a banner displayed on their listings, signaling to buyers that they can expect lower shipping rates when purchasing from these sellers.
For now, Posh Pass is only being offered to Posh Ambassadors in the US, starting October 3rd - and importantly there is no way for Ambassadors to opt out as Poshmark is presumably using these sellers to test buyer sentiment and reaction to the offering.
Those who are included in the pilot program will not pay anything for the feature initially, with Poshmark covering 100% of the difference in shipping costs until December 31, 2024.
Poshmark says the program will be subject to change after that, which means if the feature proves popular, it's a good bet sellers will be footing the bill for it after the first of the year, though it's possible Poshmark could instead go the route Etsy is taking with Etsy Insider and make it a buyer-side membership program instead.
Either way, it seems clear the timing is designed to keep shipping costs low to appeal to buyers during the critical Q4 holiday shopping season.
More info: What is Posh Pass?
These maneuvers come on the coattails of other popular marketplaces making similar changes.
Mercari US similarly shook up their fee structure in March - though so far results have been mixed with US CEO John Lagerling having to admit the new fee structure had not resulted in the GMV performance they had hoped when internally announcing a layoff of ~45% of US staff in June.
Liz Morton
One problem Mercari ran into was an increase in abandoned carts as buyers encountered sticker shock with only see the fees displayed at check out and choosing not to complete the sale - leading them change their item page design to provide a fee estimate upfront.
Liz Morton
Unfortunately, it looks like Poshmark has not learned from that lesson and may face increasing abandoned cart issues themselves with the Buyer Protection Fee only being shown at checkout.
Etsy-owned Depop also initially shifted fees in the UK before expanding the new fee structure to the US in July.
Liz Morton
And eBay just made big waves in the UK this week going fee-free for private sellers in all categories except Motors, with no buyer fees currently applied but soon to come in 2025.
Liz Morton
Meanwhile, Vinted Pro also launched in the UK today hoping to steal some thunder from eBay's big announcement.
Liz Morton
Poshmark closed their UK marketplace last year, so while some of these efforts may not be in direct competition in the US (yet), it's a sign of the changing times in the ecommerce world.
What do you think of Poshmark's new fee structure? Let us know in the comments below!
