Trish Glenn and Doug Smith discuss Poshmark fee changes and what sellers need to know about the fees rollback. They review the original fees announcement, Poshmark CEO Manish Chandra’s rollback messaging, what it means for sellers and buyers, and ramifications for the future and other marketplaces.
The Seller Community Podcast from List Perfectly is the e-commerce resource for the seller community across all platforms and a hub for information on growing your business. Find out more at thesellercommunitypodcast.com, leave a message, or ask a question at anchor.fm/sellercommunitypodcast, or email us at podcast@listperfectly.com.
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Trish Glenn (Super Sale Trish) Instagram
Episode Links
Returning to Original Fees blog post from Poashmark
Poshmark Fee Changes: What Sellers Need to Know About the Rollback
Trish: Welcome to the Seller Community Podcast brought to you by List Perfectly. My name is Trish. This, of course, is the famous Doug. Today, we are going to talk about Poshmark’s reversal of their very new and very controversial fee structure and pricing structure, which affected both the sellers and the buyers. So we’re glad to have you here. Thanks for joining me, Doug.
Doug: Let me just say, Trish, I’m glad that you are here because I need you to explain this whole thing to me because it’s very, with all these numbers, it seems very mathy.
Trish: Very mathy. That is one thing. They made it very mathy. Yes, we went from a straight 20 percent across the board, right? So, for every dollar, you were paying Posh 20 cents, and that was pretty straightforward. And the buyer had no fees at all. Okay. So the buyer came in, and they saw what your price was. I live in Massachusetts, so I have no tax on clothing. So if you’re buying from me and you were buying clothing, you wouldn’t get any tax. But if they bought from you when they were buying clothing from you, you would get taxed. You have clothing taxes where you are on clothing?
Doug: Yes.
Trish: Okay. But you’re used to that. You get the little bit of tax, and then you would pay for the shipping, done deal. It’s pretty straightforward, straight across the board on Amazon, eBay, and all major platforms. What they decided to do was they went from a 20 percent to a 20 percent flat fee.
Doug: Okay.
Trish: Decided to break it up. So, they decided to make it for the buyer and the seller. So it went to a 5. 99 percent commission rate. And then you would pay a surcharge. So, if it was from $1 to $15, you paid a buck. If it was from $15 for $30, you would pay an extra $2. And if it was 50 and over, you would pay $3. Okay. But here’s the thing, both the buyer and the seller paid that.
Doug: Okay.
Trish: We both paid that 5. 99%. So for us, it was part of our seller fees and they were calling it a buyer protection fee. That’s what Poshmark marketed as. So you went from coming in and buying an item at that and having a little tax and the shipping.
Now you’re coming in, you have the tax and the shipping plus either one, two or $3 item per item plus the 5. 99 percent buyer protection fee. I think it was a perception problem for buyers, they came in and they saw it and it seemed like they went from a $20 item, now we’re paying, $ 30 for the same item.
And I think they had a perception problem, personally. And so I think for sellers, it was going to make most of us on most transactions, we would have ended up paying less than the standard 20%, but if nobody’s buying, it doesn’t matter. If the buyers are like, I don’t want to do that. What the hell are all those fees for? It doesn’t matter if I’m making less money. Cause now I’m making no money. You know what I’m saying?
Doug: Yeah, interesting. Especially like new buyers and new sellers. And sorry to interrupt Trish, but it just makes me think about how basically these marketplaces are a spot where they connect buyers and sellers, and you’ve got certain protections on each side, and I wonder, in all this, who was more Irritated by this,, was it the buyers?
Was it the sellers?
Trish: No way. It may be equal, but I don’t think Poshmark would treat them equally. Listen, as a seller, there are only so many marketplaces where we can peddle our goods, so to speak. So if I’m peddling my goods at Posh, eBay, and Mercari, taking one-third of my where I can peddle it away from even if they change the pricing structure. I don’t think I’m gonna do that. I’m gonna say I may be annoyed. I may not like it I may go into the Facebook groups and yell and scream and stomp my little feet about it, But I don’t think as a seller we’re gonna leave the platform over something like this. Yeah, but I disagree as a buyer I think the buyers came, I think they went to go buy what they normally buy, the pricing structure is all of a sudden crazy, and I think they left.
Doug: It gets confusing, yeah.
Trish: Yeah, and so in my opinion, Poshmark only is reacting to the buyer. I do not think Poshmark is reacting to the seller, because I am willing to bet that 99 percent of the sellers, aren’t going to leave Poshmark because of a change in the pricing structure and especially because most of us would have ended up making a little bit more money.
I do think that the only thing a platform is going to really react strongly to, is a Is if it affects their bottom line. And so I am willing to bet that their bottom line, it, cause this only lasts.
Doug: Yeah, I know what you’re going to say.
Trish: I would be willing to bet. My bottom dollar that those two weeks were terrible for Poshmark. Because if they were making the same money or about the same money, they wouldn’t have converted. They, they would have saved face. They wouldn’t have done this. There were a lot of reports, sellers coming out saying abandoned carts, that people would fill carts and then see their invoice and be like, I’m outta here, forget that.
So I think that happened a lot. I think that sellers Even though we benefited from the lower fees, we could see why a buyer wouldn’t have liked this. Buyers especially criticized the lack of transparency in how these fees were presented during checkout with fees being lumped together with taxes causing confusion. So somebody like me, I live in Massachusetts, I’m buying from somebody in Massachusetts, we don’t have taxes on clothes.
So I go in and now my buyer’s fee and my taxes and all that stuff is all lumped together. I don’t know what those fees are, it seems. And! I think maybe there’s a little bit of, how do I trust what you’re doing when you’ve looked it all together? So I just think Poshmark really had to backtrack, and my educated guess is they only had to backtrack because of the buyers weren’t there. I do not think they backtracked because of sellers at all.
Doug: Let me ask you a couple of questions. So first of all, We’ve talked about this, and I definitely agree with this from the eBay side. They have all this data that they look at.
Trish: Correct.
Doug: All big decisions, and this was a big decision.
Trish: Big decision.
Doug: They’re made on data. So obviously, during those two weeks, they closely monitored sales data and all that stuff. So that had to have informed this decision. It’s also very interesting that They had PoshFest, and they chose not to even hint at this at PoshFest.
Trish: No, he hinted he did. So Manish was up on stage giving his state of posh address, which he called it. So Manish is the CEO of Poshmark. And he gave his state of the posh address. When he did it, he said they were looking at the fee structure and trying to find a way to save seller fees. That was his wording. He didn’t say anything about buyers to be quite honest with you at that time. He just talked about maybe making some adjustments to the fee structure for sellers. But that’s no indication at all what they planned on doing, but within three weeks after Posh, or four weeks after Posh, they put out that they were changing the fee structure. Here’s the other thing: I’m having an issue with Poshmark. Why the secrecy? Why not say we’re doing this and give everybody a couple of weeks to get used to it or whatever? What is in their best interest to say hey, on Monday? We’re doing this Tuesday morning. Like, say that. Like, why?
I get it. They don’t want to hear us. I understand why, literally. But the second thing is I think it also slammed the buyers. I think they would have been better off if they had said, we’re going to change this fee structure. I don’t know how I would have promoted it, but I don’t think they helped themselves by just going from one day to the next.
Doug: It seems to me like a mistake was made, and somebody had to step in and say, Hey, no, this isn’t working. We’re stopping this right now. I equate Poshmark and eBay similarly because they have very loyal sellers.
Trish: Okay.
Doug: There are some very hardcore Poshers, there are some very hardcore eBayers, and I wonder, and eBay’s gotten better at getting feedback before they do big things with certain focus groups. And I wonder if they did anything like this. I’m wondering like where this, to me, very, I joked about it earlier, but this to me, very convoluted idea came about.
Trish: What I also find interesting is that they just reverted back. The outcry or the lack of sales, which is, I think it’s more lack of sales to be honest with you, was so big that they reverted, not even tried some other kind of, we’re going to change this. We’re going to blah, blah, blah. They just reverted back to the 20. To me, that’s even more interesting. So is it such a complete failure that we’re like, Oh, hands off. That was just a terrible idea. Or are they going to now try to tweak it later?
Doug: It’s interesting too, like the way this went down. So Manish did a zoom call with Poshers, and I think it was certain selected.
Trish: Yep. Poshmark influencers. Yeah.
Doug: Yeah, so the bigger Poshmark sellers. He did a call with them on a Sunday, invited certain Poshers, did a call, and then the next day, An email went out to Posh sellers. I got it. And basically, it, I’m not going to read the whole thing, but from Manish Chandra, founder and CEO of Poshmark.
So basically, he said that they’ve decided to revert to the original fee structure. In the email, Manish said that they’re reverting back to this week within a few days of this email going out. And he said that he did say the recent fee change was made with the goal of helping sellers. He said that over the past few weeks, they’ve noticed that shoppers spent less, leaving sellers with less cash in their pockets. So what we were talking about. And he says the change did not meet their expectations and sincerely apologizes.
Basically, they’re reverting back to the original seller fee structure, removing the buyer protection fee, ending Posh Pass Beta, and then offering a rebate to give you time to adapt your listings and pricing strategies. We’ll issue a rebate for the difference in seller fees on listings created or edited during the fee change period, etc. And there are two asterisks, so you have to read the small print.
Trish: And they’re also ending the Posh Pass beta program for now, but I did read on Poshmark that they plan to go forward with this new pass, which I think is an interesting thing. So I’ll be interested to see how that works out, but I think they’re just taking it away right now. So those two things will be separate. So, the Posh Pass is in beta, and it is supposed to be free until the end of the year. And then you would have to buy into the program. So you’ll be interested to see how they do it, but it allows you to always give discounted shipping. So I have no idea what the cost would be or how it will work, but they’ve rolled it back for now, but that will come back.
Doug: So, look for the email if you haven’t seen it. There is also a spot where they offer a link to a Google form to get your feedback. So that’s interesting. If you’ve got feedback, click through. In this feedback form, they ask, do you feel returning to the original fee structure will better support you? Poshmark seems to be a pretty engaged community, and this is like something where they listen to their community and roll stuff back, But it was a very quick reversal, and it’s a tough balance. You want to have a positive buyer experience, but you have to have a positive selling experience as well because you need both of them to succeed.
Trish: Yeah, it’s true, except that without a buyer, there is no selling experience.
Doug: Yeah, that’s true.
Trish: In my opinion, you need to cater to the buyer. You just do. Without them, none of these moves. They’re the gas that keeps the whole thing moving, right? You need buyers for everything else to work. Because there’s always going to be sellers. I don’t want to imply that I don’t think that Poshmark or eBay cares about us as sellers and wants us to have a good experience. I think they do to a certain extent, but I also think that we are not who they’re catering to. They’re catering to a buyer to get the buyers to buy more.
And I also think that sellers are a little bit expendable in the sense that if Doug and I left today, there would be a new Trish and Doug in two weeks. There’d be people who would pick up our slack. This industry always has people coming in and out. And I think phases of life or whatever. So some people just leave because it’s time to do something else. Some people leave because this is a lot more work than they probably thought it was going to be. So I do not think that Posh, as much as they want to gloss over the fact, I think this is really driven by the buyer experience and not us.
Doug: I do agree with you, and sellers don’t like to hear that, but that’s the reality, and when I was at eBay, most of the time Devin Wenig was the CEO, He literally said one time, we don’t need sellers. I want more buyers.
Trish: Exactly.
Doug: More buyers benefit the sellers. Devin, if you’re listening, please don’t have me whacked with your secret security force or something like that.
Trish: But we agree with him. Why would he be sending you anything? We agree with him.
Doug: He’d be like, he’ll call me. Dan, I loved that podcast. First of all, it’s Doug. All right. Dan, keep it up. Keep up the great work. I don’t work for you anymore. Huh. Goodbye. I’d be like, remember that time I was dressed as Santa and tried to get you to sit on my lap, but you said no?
Trish: He doesn’t even work for him anymore. But I think he was right. They all need more buyers. That’s exactly what they need. So that is why I believe Poshmark’s decisions were based just on the economics of the situation and not on our outcry. Not that I don’t think they care what we have to say, but I think bottom line is a lot more.
Doug: Goose pulled that jet up pretty quick on this one, though.
Trish: Very quick. Very quick. That was a very good, that was a good reference too there.
Doug: Thank you so much. Top Gun, ladies and gentlemen, Top Gun.
So a couple of things. I do like when a company or a marketplace does respond to customer feedback and is willing to make a change instead of just letting it go on and on and ignore the feedback, eBay was very criticized for a while and they’re better, but nobody’s perfect. What effect do you think this is going to have on future like seller and buyer trust for Poshmark?
Trish: I don’t know. It’ll be interesting to see if Posh loses any ground share because of this. Two weeks. Isn’t that long. I wonder if they’re going to contact the buyer and say we’ve reverted back. I hope that Posh will reach out to anybody who abandoned a cart in those two weeks and say this was a failed experiment. If I was on their PR team, that is what I would say. I don’t know, Doug. I think only time will tell.
Doug: But they basically said this affected the bottom line, so we’re putting the brakes on this.
Trish: Yep.
Doug: So, let’s address the elephant in the room. Is this the trend? We also know that eBay dropped seller fees in the UK and Germany, which are much smaller markets than the U.S.
Trish: Okay, here’s the thing. Dropping seller fees in the UK is akin to dropping them in Maryland or Delaware.
Doug: You’re right, yeah.
Trish: Okay, we are not comparing apples to apples. And so even though the United States is a country and England’s a country, we are not in the same, how much we’re making up. Do you know what I mean?
Doug: Yeah, no, I understand. Thank you for explaining it.
Trish: It’s like dropping seller fees in all of Maryland. And could Maryland sustain that? Maybe could the United States, I think it’s a completely different animal. So I think it’s an experiment. What I do like about eBay as a company is that they do, I believe, try to do things in steps and get the data before they just do it across the board. And so whether it will work in eBay, eBay Germany, or eBay UK, I think it is yet to be seen what the long-term ramifications of that are.
Doug: Okay.
Trish: I think the selling fees and how much eBay makes on each item are significantly less. eBay is making so much more money than Poshmark. They are taking a lesser amount percentage-wise than eBay is, alright? When you then say, alright, I’m going to put it on to the buyer, And eBay has another thing going for it. It was originally an auction site. And what happens at auction houses is you pay a buyer’s fee. So there is some of this is a little bit more about cultural stuff.
So like eBay’s culture is an auction site. They still have auctions. They still do things. So I think that maybe charging a buyer’s fee may be a little bit more palatable. Then on a place like Poshmark, which I think is seen more like Amazon Marketplace, if that makes sense, right? So you go in, you think it’s going to be a straightforward, this is how much it costs. We’re going to add tax and shipping, and I get it.
I’ll be interested to see what happens. I cannot see it happening here, and I could be completely wrong, but what happened at Poshmark makes complete sense to me. I was shocked that they did it, and I didn’t think buyers would like it, and buyers didn’t like it.
Doug: But let it be said though, ladies and gentlemen, that after this went down, we did a YouTube live That was the Poshmark fees debate and Clara Albornoz, co-founder and chief strategy officer of List Perfectly, predicted that Poshmark would listen to the community and if they didn’t like it, they would roll it back. So another prediction from the trendsetters here at List Perfectly.
Trish: This has nothing to do with Poshmark. In the sense of it’s a great platform. It does a lot of great things, and I just think this one missed the mark, and they’re reverting and hopefully things will all come back together.
Doug: I need them to give a little love to the booksellers on Poshmark.
Trish: Let’s be honest. I think Posh has a little bit of a perception problem. I believe they’re still thought of as a fashion app. And even though they’re trying to, they have opened up, and they have a household, they have books, they have lots of other stuff now. I don’t think they’ve spent much time or energy on that. And if I was to give them a little bit of advice, it would be to focus on that a little bit more and try to open that market up. I agree with you. I think it would be a smart thing to do.
Doug: Yeah, my closet is filled with books, Trish. Stacked up beside the skeletons.
Trish: I am shocked by this, my friend.
Doug: There you go. Alright, anything else before we go, Trish?
Trish: No, I don’t think so my friend Douglas. Hey, it was fun to see you. We have not done this in a while We’re gonna start again soon, right? We’re gonna be doing this, right?
Doug: We’ll be back on it. Ladies and gentlemen, keep an eye out for other cool stuff. Thanks for coming to the Trish and Doug show.
Trish: Seller Community Podcast. Thank you, guys.
Doug: All right. Thank you, Trish,
Trish: Thank you, Doug.
Outro
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