Poshmark Rolls Back on Decision to Lower Selling Fees After Sellers Experience Drop in Sales

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In this photo illustration, a Poshmark Inc. logo is seen on a smartphone screen in front of its website.
Photo: Pavlo Gonchar/SOPA Images / Shutterstock

In a swift response to seller outrage, Poshmark has decided to revert to its original fee structure just weeks after announcing a reduction in selling fees. The social marketplace had introduced a new pricing model that raised fees for buyers while lowering them for sellers, but the change led to a noticeable decline in sales for many users.

In an email sent to sellers on Monday, Poshmark founder and CEO Manish Chandra apologized for the fee change, acknowledging that it resulted in shoppers spending less. This, he noted, ultimately left sellers with less money in their pockets, despite the reduction in seller fees. “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,” Chandra wrote.

The new fee structure, which Poshmark rolled out earlier this month, aimed to replace the longstanding 20% seller fee. The revised model included a 5.99% fee for sellers and a corresponding 5.99% “protection fee” for buyers. Furthermore, both buyers and sellers were subjected to an additional fee based on the total order amount. Specifically, orders under $15 incurred a $1 fee, orders between $15 and $50 faced a $2 fee, and orders over $50 attracted a $3 fee. Buyers remained responsible for shipping costs, adding further complexity to the purchasing process.

Sellers took to platforms like Reddit to voice their dissatisfaction with the new structure, reporting a significant drop in sales. Many claimed that the elevated fees deterred customers from completing purchases. One seller noted that their sales plummeted from an average of 12 to 15 sales per week to fewer than five. Such testimonials highlighted the immediate financial impact of the changes, prompting Poshmark to reassess its strategy.

Poshmark’s situation is not unique in the resale market. Earlier this year, Mercari faced a similar backlash after it eliminated seller fees and introduced a service fee for buyers related to “hassle-free returns.” The backlash from users was swift, leading Mercari to reverse part of its policy after just two months of implementation.

Following the backlash, Poshmark will restore its original fee structure, effective Thursday, October 24. Additionally, the company plans to issue rebates to sellers for the difference in fees on listings created or edited during the fee change period, which lasted from October 3 to October 23. This rebate will apply to sales made between October 24 and October 27, aiming to ease some of the financial strain experienced by sellers during the transition.

The decision to revert to the original fee structure underscores the importance of seller satisfaction for Poshmark’s business model. As a platform primarily driven by individual sellers, Poshmark’s success relies heavily on maintaining a loyal and active seller base. The swift action taken by the company indicates a willingness to listen to its users and adapt to their needs.

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