The 5 Ways Fiverr is Stealing Your Income
How Fiverr is Taking Advantage of Sellers
Fiverr is a popular website where "people do things for five dollars." You can find gigs ranging from extremely useful to the very bizarre. The site is a great find for buyers, however, for sellers, Fiverr is not fulfilling their potential by extending proper rights and benefits to the very people who make their site so valuable.
Fiverr wonderfully provides sellers with exposure and a huge potential customer base, but the site is taking advantage of sellers by takings 20% of every order, prohibiting business growth and outside communication, holding onto earned funds for two weeks, and not extending the right to choose clients to sellers.
Fiverr Takes 20% of Your Income
Yes, you read correctly. Fiverr takes 20% of your income off of every single order.
I am not aware of any other payment processor or site which shaves off 20% of the seller's income.
It is understandable that their are costs related to running the site and the Fiverr team definetly deserves some income for the service they provide - but 20% is a little much if you ask me.
Let's not forget - everyone on the site is obviously willing to do some small tasks for low compensation, but the five dollars you think you will be earning is instantly decreased to four dollars on every order. This even applies for multiple orders and gig extras.
Let's say you get an order for a gig plus a $25 gig extra. The buyer pays Fiverr $35, Fiverr keeps $1 for each fiver dollar increment leaving you with $28. You initially might figure "I'll spend six hours completing this gig, essentially earning $6 per hour." However, after the fees are taken off, you'll be earning an effective $4.60 per hour.
A dollar might not sound like much at first, but the end result is that for every five gigs you complete on Fiverr, one complete gig goes straight into Fiverr's pocket.
Fiverr Takes 20% of Your Income!
Fiverr Prohibits Business Growth
Fiverr does NOT want you conducting business elsewhere (but who can blame the when they get $1 per transaction).
All messages are monitored and it is against their terms of service for buyers to offer payment outside of the Fiverr system and for sellers to accept or propose any outside business arrangement. Any message containing email addresses, keywords such as "Paypal" or links could be flagged for violation and you might receive a warning or have your account be outright suspended.Why this is bad
For many sellers, Fiverr provides a great way to be introduced to buyers of their services. This is usually done by offering a limited, less comprehensive service to give the client a taste of your abilities and hopefully up-sell them on your more comprehensive services at a more reasonable and fair fee.
Rick offers 30 second voice-overs on Fiverr and has had many satisfied buyers who need a professional sounding voice on small projects.
After completing a gig for a happy buyer, he is contacted by the same buyer who is now looking for a voice-over artist to record audio for a complete audio book (approximately 1.5 hours in length).
According to Fiverr's terms, Rick would have to ask the client to buy a separate gig for the whole project - resulting in an annoying process for the buyer, a massive income loss for Rick, and an unfair gain taken by Fiverr. If he is caught suggesting the client email him at his business or personal email address to discuss the project in more detail, he risks having his account suspended.
Does this sound fair? The project has not gone far outside the bounds of his typical Fiverr gig and Rick deserves the chance to sell his comprehensive service to a willing buyer.
Fiverr is Earning Interest On Your Funds in Holding
After a gig is marked complete and feedback has been given, the $4 owed to the seller is not immediately available for withdrawal.
How long do they hold your money before 'allowing' you to access it: 14 days.
Now I understand that in some business models, you need to allow for possible returns and bounced checks, but with Fiverr, after a gig has been marked complete by both parties, there isn't really an opportunity for the buyer to suddenly return the product or service (though they do have the option to reject a delivered order if they feel they have been cheated).
Ultimately, I can't see a legitimate reason for Fiverr to hold the seller's funds in 'clearing' mode for two weeks other than allowing Fiverr to earn interest on your money.
Sellers are Punished for Canceling Gigs
According to Fiverr's terms, a seller must provide the service to all buyers in the set amount of time.
In many cases this is fine and the more gigs the merrier. However, Fiverr is full of bargain shoppers and at times bargain shoppers can be the worst to deal with. They may be rude, expect too much, or did not do their research into what exactly you provide. One of the goals of every freelancer is to get to a point where they can choose their clients. However, on Fiverr, a clients are treated equally, whether they deserve to be or not, and a seller's rating is negatively impacted if the seller force cancels an order.
The way around this: attempt to mutually cancel the order with the buyer and possibly explain why you can't follow through with the service. It usually works out fine, and if they don't respond within three days the order is automatically cancelled with no harm done.
Do you sell on Fiverr.com?
Fiverr isn't all that bad. Here are some things it excels at:
Great for Buyers - find anything and everything for an affordable price
2-Way Rating System
Exposure to New Markets
Possibility to become 'Featured'