If somehow you are reselling and you haven't heard of Poshmark, Poshmark is an amazing website where you can list the items you are reselling. Of course, in order to use their website, they charge a fee based on the price of the items that you sell. In this blog post we will talk about unlocking the secrets of their fees and how to get the most out of your reselling experience.
The most common way that Poshmark makes money is by taking a percentage commission from the sales made on their platform. It is kind of like taxes, where a certain percent is taken out of the money that you make. The way Poshmark operates is that they charge a 20% commission off of any sale that is over $15. That way, they keep 20% and you keep 80%. To properly calculate how you should price your items in light of this, stick around for our post on How to Price Items.
While Poshmark charges 20% on items above $15, for sales of $15 or less, they charge a flat fee. A flat fee is one that always remains fixed, and for Poshmark, that fee is $2.95. Discounting your items to $15 or below can help increase sales, but you have to be aware of the commission price, and that it is the sellers duty to pay it.
The important thing to understand is that while 20% is a quite significant commission, when your items start dropping below $15, the commission actually is much greater than 20%. So, if you sell a $10 item, they are charging 29.50%. The lower the price, that higher percentage that $2.95 fee takes out of your profit. That is why Poshmark takes a higher dollar value on higher priced items, but you are also making a less profit margin than on the cheaper items.
While the Poshmark commissions seem pretty high, those fees ultimately fund the aspects that make Poshmark so good for resellers, such as helping cover the shipping rate and marketing to a wider audience. To better understand the ins and outs of Poshmark, stay posted for our thoughts on the Pros and Cons of Poshmark!
Here is a chart explaining the fees: