Editor’s Note (October 2024): Shortly after announcing these fee changes, Poshmark decided to revert back to their original fee structure of 20% for sellers and no additional fees for buyers. While the fee structure discussed in this article is no longer active, the analysis of why Poshmark attempted these changes remains relevant and provides insight into the challenges the platform faces.
Poshmark’s New Fee Structure
Poshmark has a flat-rate 20% fee applied to the seller’s revenue.
For items under $15, Poshmark takes a flat fee of $2.95. For items $15 and above, Poshmark takes 20% of the sale price.
Check out this Poshmark Fee Calculator to see how the fees break down.
Or, play with this slider to see how the fees break down (assumes no shipping discount and 8% tax, the percentage Poshmark gets is calculated based on the sale price not what the customer payed):
Customer Pays
$0.00
Poshmark Gets
$0.00 (0%)
Seller Gets
$0.00
On October 3, 2024, Poshmark changed their fee structure to something different, and then reverted back to the original fee structure on October 21, 2024.
To me, this move means a few different things. Let’s get into it.
1. Poshmark had a seller problem
It’s entirely obvious to me that Poshmark was losing sellers.
And, based on my own data running a Poshmark automation tool, I think that’s true. It’s not like my business is growing like gangbusters.
So, what do you do to get more sellers?
Reduce seller fees, which increases profit for sellers.
And, Poshmark also introduced Posh Pass, which automatically reduces shipping costs for Poshmark Ambassadors to $5.95 shipping (until December 31, 2024).
They’re trying to win back sellers AND make them deeply engaged on the platform by upping their ambassador status. If you’re not an ambassador, you’re losing out on profit.
2. Live selling is booming
The new fee structure means that Poshmark gets more percentage of a sale with lower cost items.
Check this out:
For a $10 sale with no shipping discount for the buyer and 8% tax, Poshmark now gets $4.33. That’s 43% of the original sale price!
For a $50 sale with no shipping discount for the buyer, and 8% tax, Poshmark gets $13.50. That’s 27% of the sale price.
For a $100 sale with no shipping discount for the buyer, and 8% tax, Poshmark gets $19.97. That’s 20% of the sale price.
For a $200 sale with no shipping discount for the buyer, and 8% tax, Poshmark gets $32.91. That’s only 16% of the sale price.
Check out this Poshmark Fee Calculator to see how the fees break down.
As we can see, Poshmark is scalping lower priced sales.
And let’s be honest, that’s for a good reason. Lower-priced items selling to price sensitive customers usually means more hassle.
But, that’s not all. Live selling is typically ALL lower priced sales.
And, the people buying those live selling items are typically addicted to shopping (or, addicted to getting what they think is a good deal).
Poshmark is tapping into this ravenous customer base by upping the fees for buyers, and incentivizing live sellers to keep selling by reducing fees for sellers.
3. Luxury selling was slowing down
Luxury brands and items have always driven the most revenue on Poshmark. I know because I have the data to back it up.
Louis Vuitton, Chanel, and Gucci all out-class every other brand’s sales on the platform.
And categories like luxury handbags, shoes, and dresses all sell the best on Poshmark.
As we just saw above, Poshmark is reducing their cut of the sales of those higher priced items. That’s an odd move, if Poshmark wants to make more money.
Ah, but you see, if the fees are too high for sellers, they’ll just sell somewhere else. It’s no problem for them.
And if there are no luxury items on Poshmark then they will quickly lose a highly lucrative customer base.
So, by reducing the fees for sellers they’re incentivizing luxury sellers to list more items and sell high-ticket items.
Also, by reducing fees, it allows sellers to reduce their selling price even more to be competitive, which means buyers will come to Poshmark to buy luxury items.
More sales means more money for Poshmark, and more profit for sellers. Win win.
4. Lower seller fees means lower prices
I believe this fee change won’t significantly impact buyers.
Sellers will lower their prices to stay competitive and increase sales volume.
When buyers perceive they are getting a good deal, they are more inclined to make a purchase.
Although buyer fees raise the cost of items, buyers will continue to shop on Poshmark because they can still find great deals.
More live selling, more luxury, less cheap stuff
In conclusion I think Poshmark is reshaping the platform.
They want all lower-priced sales to be in live selling for more price-sensitive but highly-engaged customers.
They want expensive, high-ticket items in the feed for wealthy customers.
They don’t want cheap second-hand stuff in the feed, because it’s just more hassle for Poshmark. The fees are enormous on cheaper items as a percentage for buyers.
To me, this is an excellent move for Poshmark and sellers. I think it’s brilliant, actually.
It’s going to make Poshmark the go-to place for getting a deal through live selling, and getting a deal on luxury items in the feed.
Sellers can afford to reduce their luxury item prices now because the seller fees are lower, which makes it more competitive and will move more volume.
I think if you want to win on Poshmark in the next few years, you might need to adjust your strategy.
Either double down on live-selling and sell cheaper items.
Or, double down on luxury items and sell in the feed.
And I think if you REALLY want to crush it, sell luxury items via live selling. More profit for you, and a very engaged customer base.
I don’t recommend trying to sell low-ticket unbranded items in the feed. That’s now only for live-selling.
I hope this advice helps you make more sales on Poshmark and earn more as a reseller.
Jordan 🤞