New Poshmark Fee Structure: What it Means For You
Neek Zanfack
Poshmark has announced significant updates to its fee structure, along with the introduction of Posh Pass, a new program for Poshmark Ambassadors. These changes will have a notable impact on sellers' businesses, and it's crucial to understand how they work together. In this post, we break down the new fees with real-world examples, comparing the old and new structures using a $7.67 shipping fee and explain Posh Pass. We'll also share strategies to help sellers adapt and maximize their earnings, especially when selling higher-priced items.
Fee structure
Previous fee structure:
- Sales Under $15: Flat fee of $2.95
- Sales $15 and Above: Commission of 20% of the sale price
New fee structure:
- Flat Fee on All Sales:
- $1 fee for sale price under $15
- $2 fee for sale price between $15 and $50
- $3 fee for sale price $50 and above
- Commission on Sales: 5.99% of the total order (including shipping and taxes)
Posh Pass:
Alongside the new fee structure, Poshmark has introduced Posh Pass:
- A closet-wide shipping discount program that lowers the shipping fee to $5.95, paid for by Poshmark.
- Available exclusively to Poshmark Ambassadors.
- Offered as a promotional benefit through December 21, 2024.
- Currently only available in the United States.
Real-world examples
Example 1: Sale under $15
- Item Sold For: $10
- Shipping Fee Charged to Buyer: $7.67
- Tax (Assuming 8% Rate): $10 × 8% = $0.80
- Total Order Amount: $10 (sale price) + $7.67 (shipping) + $0.80 (tax) = $18.47
Previous fee structure calculation:
- Old Fee: $2.95 (flat fee)
- Old Earnings: $10 (sale price) - $2.95 (fee) = $7.05
New fee structure calculation:
- New Fee:
- Flat Fee: $1 (since sale price is under $15)
- Commission: 5.99% of $18.47 (total order amount) = $1.11
- Total New Fee: $1 + $1.11 = $2.11
- New Earnings: $10 (sale price) - $2.11 (fee) = $7.89
Earnings difference:
- Increase in Earnings: $7.89 (new) - $7.05 (old) = +$0.84
Example 2: Sale between $15 and $50
- Item Sold For: $30
- Shipping Fee Charged to Buyer: $7.67
- Tax (Assuming 8% Rate): $30 × 8% = $2.40
- Total Order Amount: $30 (sale price) + $7.67 (shipping) + $2.40 (tax) = $40.07
Previous fee structure calculation:
- Old Fee: 20% of $30 (sale price) = $6.00
- Old Earnings: $30 (sale price) - $6.00 (fee) = $24.00
New fee structure calculation:
- New Fee:
- Flat Fee: $2 (since sale price is between $15 and $50)
- Commission: 5.99% of $40.07 (total order amount) = $2.40
- Total New Fee: $2 + $2.40 = $4.40
- New Earnings: $30 (sale price) - $4.40 (fee) = $25.60
Earnings difference:
- Increase in Earnings: $25.60 (new) - $24.00 (old) = +$1.60
Example 3: Sale over $50
- Item Sold For: $100
- Shipping Fee Charged to Buyer: $7.67
- Tax (Assuming 8% Rate): $100 × 8% = $8.00
- Total Order Amount: $100 (sale price) + $7.67 (shipping) + $8.00 (tax) = $115.67
Previous fee structure calculation:
- Old Fee: 20% of $100 (sale price) = $20.00
- Old Earnings: $100 (sale price) - $20.00 (fee) = $80.00
New fee structure calculation:
- New Fee:
- Flat Fee: $3 (since sale price is $50 or above)
- Commission: 5.99% of $115.67 (total order amount) = $6.93
- Total New Fee: $3 + $6.93 = $9.93
- New Earnings: $100 (sale price) - $9.93 (fee) = $90.07
Earnings difference:
- Increase in Earnings: $90.07 (new) - $80.00 (old) = +$10.07
Summary table
| Sale Price | Old Fee | Old Earnings | New Fee | New Earnings | Earnings Difference |
|---|---|---|---|---|---|
| $10 | $2.95 | $7.05 | $2.11 | $7.89 | +$0.84 |
| $30 | $6.00 | $24.00 | $4.40 | $25.60 | +$1.60 |
| $100 | $20.00 | $80.00 | $9.93 | $90.07 | +$10.07 |
Impact of the new structure and Posh Pass
- Lower Fees for Higher-Priced Items: The new structure generally benefits sellers of higher-priced items, as the percentage of fees decreases as the sale price increases.
- Potential Impact on Lower-Priced Items: Sellers of lower-priced items may see a slight increase in fees, which could affect pricing strategies.
- Shipping Advantage for Ambassadors: Poshmark Ambassadors with Posh Pass can offer more competitive shipping rates, potentially attracting more buyers.
- Buyer Behavior: The new buyer's fee may impact sales as some buyers could be reluctant to pay additional fees. This might require sellers to adjust their pricing strategies.
Strategies to adapt to the new fees
- Optimize for Posh Pass (for Ambassadors):
- Highlight the $5.95 shipping offer in your listings to attract budget-conscious buyers.
- Consider creating special promotions or bundles that take advantage of the reduced shipping fee.
- If you're not yet an Ambassador, consider working towards this status to benefit from Posh Pass.
- Incorporate Shipping into Item Price:
- Offer "free shipping" by including shipping costs in the item price.
- Since the new fees don't affect your take home if you offer free shipping or not, this is a good strategy to attract more buyers.
- Adjust Pricing Strategies:
- Reassess your item prices to account for the new fee structure while remaining competitive.
- Consider slight price increases to offset the commission on shipping.
- Bundle Products:
- Offer product bundles to increase the sale price per transaction.
- Higher sale prices benefit from lower fee percentages under the new structure.
- Promote Higher-Priced Items:
- Focus on selling items over $50 to take advantage of lower fees relative to the sale price.
- Highlight the value and benefits of higher-priced items to encourage sales.
- Monitor and Review Fees Regularly:
- Keep track of all fees to understand their impact on your profitability.
- Use this information to make informed decisions about pricing and inventory.
- Communicate with Customers:
- Be transparent about any changes in pricing or shipping.
- Excellent customer service can lead to repeat business and positive reviews.
Conclusion
Poshmark's new fee structure reduces earnings on lower-priced items but increases profitability for higher-priced sales. By adjusting your pricing strategy, focusing on bundles, and promoting higher-priced items, you can adapt to these changes and continue to succeed on the platform. Whether you're an Ambassador benefiting from Posh Pass or a seller working within the new fee structure, staying flexible and continuously monitoring your performance will be key to thriving on Poshmark.
Reeva sellers do not have to worry about figuring out the new fee structure. We handle everything for them.
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Sources:
Understanding Poshmark Fees: A Complete Breakdown for Sellers
