Poshmark Cancels New Fee Structure After Seller Backlash

According to energy sellers The Posh Kings, who attended Sunday’s Zoom conference, executives also told participants that all previously announced buyer and seller fees were being waived. The moves were confirmed Monday in a company press release.

In a blog post titled “Return 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 has spoken with many community members and “listened carefully to your feedback.” “The results of the changes did not meet our expectations, and I sincerely apologize for the disruption and impact this has had on you,” he said .

Chandra added: “Over the past few weeks, we have seen shoppers spend less on purchases as they have shifted their spending from orders to commissions, leaving our sellers with less money in their pockets – despite the reduction in seller commissions.”

The news comes after weeks of unrest and backlash from retailers. Since the new fees took effect, merchants have reported a drop in new sales for a short period. Last week, the company hinted in a message to users that it was “working” on the issue by revising the policy.

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

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

The canceled policy, announced earlier this month, promised lower commissions for sellers. However, it also mandated that both sellers and buyers pay a commission of 5.99% per item sold. For buyers, this fee is called a “buyer protection fee.” Buyers and sellers also had to pay an additional $1, $2, or $3 depending on the price category the item fell into: under $15, between $15 and $50, or over $50. Poshmark is now returning to its original commission structure of a 20% seller commission on sales over $15 and a flat commission of $2.95 on sales $15 and under.

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

In addition to canceling the new tiered system, the company is also eliminating a new “buyer protection fee” and rolling back the beta Posh Pass program it introduced to help shoppers save on shipping. Through October 27, Poshmark is giving sellers discounts “on the difference in seller fees for listings created or edited during the fee change period” and sold through the Buy It Now feature.

Lost sales

Although the new system has only been in place for a little over two weeks, sellers have already reported a significant drop in sales as buyers abandon purchases after seeing an additional dollar amount that must be paid as a “buyer protection fee.”

The Posh Kings, for example, said sales fell by double digits in the short period the new fees were introduced. John Anthony of The Posh Kings told Modern Retail that while many sellers are happy that buyer fees have been eliminated, the current policy still leaves some wholesale retailers frustrated that there is no long-term solution to the problem of high seller fees not found yet.

“I would say about 90% of sellers are furious that (Poshmark) promised some relief on high fees and in the end they took it all away,” Anthony said. He added that many of the top sellers are moving to live sales platforms such as Whatnot. “Some have already scheduled performances for this week,” he said.

Cassandra, a Poshmark seller who primarily sells items under $100, told Modern Retail that she’s experienced an “overall decline in sales” since the new changes took effect. “My understanding is that the new fee structure hurt sellers like me the most,” she said, referring to lower-priced sellers.

Cassandra added that she has also “noted an increase in buyers submitting lower offers than usual, which is likely offsetting the new fees.” However, Cassandra did not adjust the prices of her products since most of them cost less than $30. “I left them as is,” she said.

Instant relief

Some retailers told Modern Retail they were glad their voices were being heard.

“I am grateful to the community for speaking out so passionately about their grievances that Poshmark became aware of what so many of us feel,” Cassandra said.

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

Some sellers, however, are concerned that Poshmark will charge other fees to offset the money it could make through the new fees. “I’m glad to see that Poshmark has eliminated fees, but I don’t think this will be the end of the fee changes,” a seller named Riley told Modern Retail. “I think we have to be ready for change.”

While Poshmark hasn’t announced any additional fees, it is now rolling back its beta Posh Pass program, which it introduced to help drive more purchases under a new fee structure for shoppers. This program reduced shipping costs from nearly $8 to $5.95 and placed the cost on the seller rather than the buyer. “We will continue to explore programs like this that will benefit our community in the future,” Chandra wrote Monday.

Riley said she was disappointed with the change in Posh Pass delivery terms. “I think it was actually a good idea for Posh to offset some of the shipping costs for customers while still benefiting from being a Posh Ambassador,” she explained.

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

In Poshmark’s case, Anthony believes that “the vast majority of sellers are feeling defeated right now,” especially after the company hinted at the exciting possibility of reducing seller fees at Poshfest in September. But after it became clear that the expected reduction would come from additional commissions from buyers, sellers were back at square one.

“Now it appears that this is the case, so sellers are looking to other platforms that offer much lower seller commission rates,” Anthony said.