It's Getting Way Cheaper to Sell Clothes on Depop

If you've been thinking about slimming down your wardrobe, good news: Depop just removed its selling fees.

Previously, sellers paid a 10% fee on every sale. As of this week, that fee is totally gone for U.S.-based sellers, Depop announced in a news release.

The move by the peer-to-peer clothing marketplace follows a successful experiment with a no-seller-fee policy in the U.K.

If you’re not familiar, Depop is a trendy shopping app, popular among teens and young adults interested in fashion and thrifting. Sellers can curate their own shops, offering clothing and accessories at prices they set. The range of sellers is diverse, from individuals simply clearing out their closets to larger sellers with a brand identity — and in some cases, huge social followings.

The company said the move should make it easier to turn your closet into cash. Depop expects that its catalog of 34 million items will grow as a result of the change.

How will Depop make money without seller fees?

In a news release, it said that “the removal of selling fees is part of a wider update to Depop’s fee structure, which also includes the introduction of a small marketplace fee for buyers in the U.S. from July 18th onwards.” Sellers will continue to pay a payment processing fee of 3.3% of the price (including shipping and tax) of each item plus 45 cents.

According to Depop’s updated terms of service, this marketplace fee will be up to 5% of the price and an additional fixed amount of up to $1. Buyers will see the fee in the checkout process, and they'll only pay the fixed amount once per transaction if multiple items from one seller are purchased together. (Depop calls these “bundles.”)

Depop has been owned by Etsy since 2021 and claims sellers have made $3.5 billion to date.

Effects of Depop fee removal

Sellers may need to brace themselves for smaller margins on their sales, as price-sensitive customers will likely lower what they’re willing to pay once there’s a fee that they have to factor into their total cost.

Depop sellers are already used to getting lowball notifications from users with the "Send offer" feature, and that might increase if buyers start asking to get discounts to offset the fee.

However, the company suggests that the move to source its revenues from the buyer side of the transaction should lead to more listings, ultimately improving the quality of the marketplace.

“Encouraging more listers and more listings means offering greater choice for buyers — helping them to find the items they love, at the right price,” Depop CEO Kruti Patel Goyal said in a Monday statement.

The online resale industry is highly competitive, and there are a number of alternative sites for sellers, including Poshmark, ThredUp and eBay. Depop is clearly betting that removing seller fees will help it stand out in a crowded field.

Mercari, another site similar to Depop and its competitors, eliminated its 10% seller fee earlier this year, claiming it was the first major marketplace to do so. The company’s CEO told Modern Retail that Mercari made the change because it was losing sellers who would go and list their directly for sale on social media platforms instead.

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