Poshmark reverses new fee structure after seller backlash

According to power sellers The Posh Kings, who were present on Sunday’s Zoom call, the executives also told the attendees that all of the previously announced buyer and seller fees are being rolled back. These moves were confirmed Monday in a company press release.

In the blog post, titled “Returning to Original Fees,” Chandra reiterated that the platform is returning to its original fee structure on October 24. In recent weeks, Chandra wrote, the company had spoken with many community members and “listened closely to your feedback.” “The outcome of the change did not meet our expectations and I sincerely apologize for the disruption and impact that this has had on you,” he said.

Chandra added, “Over the past few weeks, we have seen that shoppers spent less on purchases as they shifted their spending from orders to fees, leaving our sellers with less cash in their pockets — despite the seller fee reduction.”

This news came after weeks of tumult and seller backlash. Since the new fees went into effect, sellers reported seeing a drop in new sales during the short period. Last week, the company hinted in a message to users that it was “working on” the issue by revisiting the policy.

When contacted by Modern Retail, a Poshmark spokesperson said the company has no additional information to share beyond Chandra’s blog post. “We sincerely apologize for the disruption and impact that this has caused our community and remain dedicated to prioritizing seller success and shopper satisfaction,” they added.

Poshmark launched in 2011 as a way for people to browse, buy and sell used clothes. In 2023, it was acquired by the South Korean internet company Naver in a $1.2 billion deal. Today, Poshmark says it has 130 million registered users across the U.S. and Canada and claims its sellers have sold over 300 million items to date. In contrast to competitors like ThredUp, Poshmark uses a peer-to-peer business model, meaning sellers have spent years building entire businesses selling used clothes on the platform.

The now-reversed policy, announced earlier this month, promised lower seller fees. However, it also dictated that both sellers and buyers pay a 5.99% fee per item sold. For buyers, it called this fee a “buyer protection fee.” Buyers and sellers also had to each pay an additional $1, $2 or $3 based on a pricing bracket of where the item falls: under $15, between $15 and $50 or more than $50. Now, Poshmark is going back to its original fee structure of a 20% seller fee for sales over $15 and a $2.95 flat fee for sales $15 and under.

When Poshmark’s new fee policy went into effect earlier this month, sellers took to social media to protest and encourage others to contact Poshmark. Many posted complaints in reviews on the iOS App Store. 

Beyond nixing the new tiered system, the company is also doing away with the new “buyer protection fee” and rolling back the Posh Pass beta program, which it introduced to help buyers save on shipping. Through October 27, Poshmark is issuing rebates to sellers “for the difference in seller fees on listings created or edited during the fee change period” and sold via the Buy Now feature. 

Losing sales

Though the new system has only been in place for a little over two weeks, sellers have already reported significant drops in sales as buyers abandoned purchases after seeing the additional dollar amount to be paid as a “buyer protection fee.”

The Posh Kings, for example, said that sales dropped by double digits during the short period the new fees were implemented. Jon Anthony of The Posh Kings told Modern Retail that while many sellers are relieved that the buyer fees were taken away, the current policy still leaves some volume sellers frustrated that a long-term solution to high seller fees has yet to be found. 

“I would say about 90% of sellers are furious that [Poshmark] promised some relief of the high fees, and, in the end, it all was taken away,” Anthony said. He added that many of the top sellers are leaving for live selling platforms like Whatnot. “Some have already set up shows for this week,” he said. 

Cassandra, a Poshmark seller who mainly sells items under $100, told Modern Retail she’s had an “overall reduction in sales” since the new changes went into effect. “From my understanding, the new fee structure hurt sellers like me [the] most,” she said, referring to sellers with lower-priced listings. 

Cassandra added that she also “noticed an increase in buyers sending lower offers than usual, likely to make up for the new fees.” However, Cassandra did not adjust the prices of her items because most were under $30. “I left them as is,” she said.

Momentary relief

Some sellers told Modern Retail that they’re glad their voices were heard.

“I’m grateful for the community speaking up so passionately about their dissatisfaction so that Poshmark was made aware [of] how many of us felt,” Cassandra said.

Another seller named Victoria said, “I’m really glad to hear Poshmark is listening to [its sellers]. This is a site that relies so heavily on its users, so it’s crucial that they listen to feedback.”

Some sellers, however, worry that Poshmark is going to come out with different fees to make up for whatever money it would have racked up through the new fees. “I’m glad to see Poshmark reversed the fees, but I don’t think this will be the end of fee changes,” a seller named Riley told Modern Retail. “I think we have to be prepared for changes.”

While Poshmark did not announce any additional fees, it is now rolling back its Posh Pass beta program, which it introduced to help boost purchases under the new buyer fee structure. That program lowered shipping fees from nearly $8 to $5.95 and put the cost on the seller rather than the buyer. “We’ll continue to explore similar programs that will benefit our community in the future,” Chandra wrote on Monday.

Riley said she was disappointed to see the Posh Pass shipping terms leave. “I think it was actually a good idea for Posh to offset some shipping costs for buyers while actually having a benefit to being a Posh Ambassador,” she explained. 

As the latest reactions show, Poshmark and its community of sellers are still trying to figure out a long-term fee structure. Other platforms are also facing similar issues. In March, Mercari decided to eliminate seller fees, introduce buyer fees and allow returns for any reason. After sellers criticized the changes, Mercari reversed part of the policy and said buyers could initiate returns within three days of delivery, and only in limited instances.

In Poshmark’s case, Anthony believes “a large majority of sellers feel defeated now,” especially after the company teased the exciting possibility of a seller fee reduction at Poshfest in September. But after it became clear that the supposed reduction would come at the expense of additional buyer fees, sellers are finding themselves back at square one.

“Now it seems this is just the way it is, which is why sellers are looking at other platforms that offer much lower seller fee rates,” Anthony said.