The Financial Price DTC Brands for Being Omnichannel

Key takeaways for ecommerce brands:

1. Platform fee changes, exemplified by Poshmark's controversial restructuring and similar moves by Etsy and Amazon, demonstrate the risks of relying on a single marketplace.
2. While selling across multiple platforms reduces platform dependency risk, it creates significant financial management challenges, particularly in inventory tracking and sales data integration across different marketplaces.
3. Real-time, ecommerce-first accounting solutions are becoming essential for DTC brands to effectively manage cross-platform operations and make data-driven decisions.

It's not every day that an ecommerce marketplace slashes seller fees – and still manages to spark outrage among DTC brands. Poshmark's new fee structure did just that. In early October, the leading digital platform in fashion resale announced it was lowering seller fees from 20% to 5.99%, along with a $1, $2, or $3 fixed fee, depending on the order total. At the same time, Poshmark introduced a new buyer protection fee, shifting some of the burden to consumers.

With the new buyer protection fee, a shirt that is listed for $20 would cost more than $31, not including state sales tax. That brought the wrath of DTC operators, who fear buyers will leave their carts at checkout after seeing the total amount they need to pay, leading to a significant drop in sales.

“I’m telling you right now, the ‘Protection Fee’ is going to destroy Poshmark because buyers are going to leave,” wrote one seller on Reddit. “Sure, this new policy benefits sellers in the short term, because they make more money, but let me ask you, how will they make money if they sell less because buyers aren’t buying as much due to the new fees?”

Brands are also worried that buyers will request reduced prices due to the additional fees. According to some sellers, this trend has already started. “I’ve received two offers today and both are super lowball,” a Poshmark seller wrote on Reddit. “One buyer bundled (orders together) and said that I should take into consideration the new fees she has to pay. I already have very competitive pricing on items in my closet. This sucks.”

Fee Dynamics: How Marketplaces Are Reshaping DTC Economics

Marketplace fees have been a controversial topic in the DTC ecommerce space. In 2022, Etsy sellers went on strike over a 30% seller transaction fee hike. This March, Amazon introduced an inbound placement fee, penalizing sellers for shipping their inventory to a single Amazon warehouse instead of distributing it across multiple locations. A month later, it launched a low-inventory-level fee, but had to implement a grace period after facing backlash from sellers.

Poshmark's fee changes come after rival Mercari, a peer-to-peer resale app, eliminated selling fees entirely last spring. Other resale marketplaces, like Etsy’s Depop and eBay UK, followed Mercari's lead. But while these platforms' new fee structures kind of went under the radar, Poshmark seems to be the poster child for how not to do things.  

“A lot of people feel deceived,” said Jon Anthony, one half of the “The Posh Kings,” a married couple who have been selling on Poshmark since 2014. “The other platforms aren’t doing this. So some of the die-hard Poshmark sellers are realizing they need to diversify because they know many of their customers aren’t going to pay those fees.”  

Diversifying, in this context, means selling across multiple platforms – something some Poshmark sellers have started to do. “I already sell on other platforms and am grateful that I have been,” said Anna, a Poshmark seller since 2018. "I am established elsewhere, and that is going to save me. Otherwise, I fear my business would potentially come to a halt.”

When More Channels Mean More Complexity: The Financial Challenge

Multichannel selling has much to recommend it. From increased sales to improved brand awareness to diversified risk, listing the same products on multiple platforms is a great way to maximize a business's potential. It also involves some challenges – especially when it comes to ecommerce accounting and bookkeeping.

While often used interchangeably, ecommerce accounting and bookkeeping are not the same thing. Bookkeeping focuses on financial transactions: recording, tracking, and managing data. Accounting is the practice of reporting and analyzing financial data to make profitable business decisions. In other words, if bookkeeping is the “how,” accounting is the “what” of ecommerce finances.

That distinction matters because how you keep your books – timeliness, categorization, and reconciliation – determines what those books can tell you. Accounting only becomes a profit-generating mechanism when the right data is combined in the right way. And this is where multichannel selling can complicate things. 

It starts with online store inventory management. Whether due to manual practices or antiquated bookkeeping software, many multichannel brands struggle to track how many items they have left in stock and when it’s time to order more. Based on our experience working with thousands of DTCs, poor visibility across multiple channels is one of the major pain points of online store inventory management.

Another pain point is integrating and syncing sales data from several platforms. Without the ability to pull real-time sales data directly from the sources of truth, DTC operators can't map the correct numbers to financial reports. That, in turn, can render their accounting efforts ineffective at best, and irrelevant at worst. 

The Bottom Line: Modern Problems Need Modern Solutions

The Poshmark fees controversy highlights a crucial lesson for DTC brands: relying on a single marketplace is increasingly risky in today's dynamic ecommerce landscape. While multichannel selling offers a safety net against external policy changes, it also introduces complexity to financial management, as traditional bookkeeping and accounting tools are not optimized for dealing with multiple sales channels.

For DTC brands to truly thrive in this environment, they need to adopt financial solutions that can provide real-time visibility into their operations. Only services built specifically for ecommerce can effectively tackle the challenges of cross-platform inventory management and sales data integration, turning multichannel complexity from a potential obstacle into a competitive advantage.