First, the Fees Breakdown
To get everyone up to speed, Poshmark's fees are broken down as such (May 2019):
1. Anything below $15 has a fixed fee of $2.95
2. Anything above $15 has a 20% fee
The $2.95 Fee
Items sold for $3-$14 are hit with a fixed $2.95 commission fee. Note that the minimum you can sell an item for is $3 and Poshmark does not allow for decimals (e.g. $5.99) when it comes to pricing, only whole numbers are accepted. Here's the commission schedule for items that are $3-$14:
You're entering dangerous territory here due to the fee % increase relative to the sale price
So is the first fee structure fair? Simply put, yes.
Logically it would make sense to have a fixed fee for low priced items. Just think of it as the cost of doing business not just for you but for Poshmark. They gotta receive something on their end to process the payment and other administrative costs that might arise for moderating returns.
It's not Poshmark's fault you're selling low priced items, it's your fault. I myself have many $14 and below items in my closet but I use a simple method to get around this 21% and above fee cost. I'll explain this method on another post and leave you guys hanging for now...
The 20% Fee
I'm sure this part is what you're here for and what applies to most of us.
The 20% commission fee can be better understood when you look at this through the lens of an uninterested party.
By answering these questions, maybe it will make more sense to you:
1. Have you ever built a website that gets consistent traffic?
2. Do you do anything administrative/technical for the Poshmark platform?
3. When problems occur on the app, are you the first one to fix that problem?
4. How much time are you saving considering you don't have to market your own platform?
Those 4 questions that should steer you to the right answer. But for some of us, we need a little more convincing, so I'll continue...
The fact that you can sit on the toilet and make a listing that will be visible to thousands if not, tens of thousands of people in the next minute is a miracle many of us take for granted. The internet and platforms like Poshmark did not just happen, I'm sure you know that. But to think a 20% commission is not worth the time, risk and development cost is greed on our end, not Poshmark's. If you're savvy enough, go make your own e-commerce platform and let everyone know how that works out for you. By the way, I did try to do it myself to sell clothes, so I kinda know what I'm talking about here. And the fact that we're still on Poshmark's platform speaks volumes about our confidence in ourselves to pull off our own platform. I'm not saying it's impossible, I'm saying it's really difficult.
Some Other Things
I saw something on Instagram the other day that really irked me. Someone had the nerve to say the "profit" Poshmark makes on the 20% commission fee is in the billions and that they should lower it to 10% which would still make them billions. Apparently, this person doesn't know what profit means and don't understand how much 1 billion is. In othe words, truly understand what this commission fee means and be fair about your assessment before bashing the 20% fee.
I rarely defend Poshmark on its decisions but I do agree with their 20% comission completely. As you probably know from my Instagram posts, I have a lot of harsh words for Poshmark but I do know where to draw the line and know what hand is feeding me. I have no reservations about this and would gladly account for the 20% it when I'm running my numbers; you should too.
I leave you with a quote I read that hopefully will drive the point home. "The same people that complain about the 20% Poshmark fee are the same people that complain about paying taxes after winning the Lotto."
We all need to be as happy as this Lotto winner
Often I realized that people just don’t think about all that goes into making sure Poshmark work. All the emails sent to them from sellers and buyers. All that goes into them negotiating a deal for us to be able to have prepaid labels and one shipping price. Running a business itself is a lot and I feel like the people selling who get charged this 20% should know what it is to run a business to know the ins-and-outs the ups and downs and the overhead costs that go into keeping a business up and running smoothly. I’m never quite sure why people get upset about the 20%, but I guess it’s because they come from an old school-type of platform that didn’t charge “that much”. However if they add up every little nickel and dime they had to spend for PayPal, their own shipping and every other XYZ they would realize they’re spending the same amount of money but doing more work. -SwagSlayer
EXACTLY, people think the internet and poshmark just “works”. Talk about taking something for granted…