WTF Just Happened at The RealReal?

The pre-loved luxury platform overhauls its commission structure

While we were all busy celebrating the holidays, The RealReal announced a complete overhaul to its commission structure which ultimately leads to sellers earning less than before (sometimes a lot less) on most items.

Here’s What Stayed the Same

The RealReal is still incentivizing sellers via its RealReal Rewards program, which offers perks for net sales above various cliffs which are: total net sales below $1,499; $1,500-$4,999; $5,000-$9,999, and over $10,000. The biggest change comes for sellers who fall in the over $10k category.

And Here’s What Changed

Previously, if you sold over $10k worth of bags via The RealReal, the company would cap its commission on any individual item — regardless of its sale price — at 30%. That perk has disappeared. This means if you sold over $10k worth of bags that each sold for $1,499 on The RealReal in 2022, you would have pocketed $7,000. In 2023, those same bags would only get you $6,500. And if you’re selling bags under $1,499 the economics quickly deteriorate.

Additionally, users on Reddit noted that the new verbiage specifically calls out “net sales” which means the price the bag sold for — not the price the bag originally listed for. Because The RealReal can (and does) discount bags up to 20% without approval from the seller, this small language tweak could signal significant economic changes. Not only do sellers take a lower payout based on a lower sale price, but also their bags could get dropped into a tier with a lower commission rate.

The Poor Economics for More Accessibly-Priced Bags Is Intentional

The RealReal explained that it is charging more for “low-priced transactions that have typically resulted in loses” for the company. After The RealReal’s stock fell 90% in 2022, the company is under pressure from investors to turn a profit and it has made clear that its path to profitability is by focusing on higher-priced goods.

Other Changes

In addition to the above, The RealReal increased rates significantly on its FirstLook and FirstLook Platinum programs. The FirstLook program price increased 20%, from $120 per year to $144 per year. The primary benefit here is that you can shop new items for 24 hours before the general public. The FirstLook Platinum program rate increased a whopping 67% (!!!) from $360 to $600 annual. The primary benefit of this one is unlimited 2-day shipping (in addition to being able to shop early).

What do you think about these changes? Will you still sell with The RealReal?