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The 5 Ways Fiverr is Stealing Your Income

Updated on May 28, 2012

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.

For Example:

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?

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Fiverr's Strengths

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'

Dispute Resolution

Comments? - Let's Hear 'Em...

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    • mohinipuranik profile image

      mohinipuranik 3 years ago

      I liked the points you have explained. Even cancelling a order by seller, gives cancellation ratio on it's profile. I think, it shouldn't be there. Keeping the money for 14 days is also too much. Some services can't be offered without using contact details where we have to access the account of buyer for fixing website issues. Thanks for the lens.

    • profile image

      INeedGlasses 5 years ago

      Agree with you, Sam. Plus many freelance sites allow you to post your own links, contact, etc.: eBay, in your About Me area, eLance, once PMs are opened up, Odesk and so on. There is no harm telling about yourself.

      In fact today, I prefer to know something about the company or individual I buy from. It's less scary, and you learn more about the service provider up front instead of wasting time on people who really may not be qualified to complete the orders in a timely fashion or with quality.

      FIverr must know they are fine for quick $5 orders, but not set up for large projects. You simply cannot manage tasks via their simplistic message area, not always worry about timed tasks, etc. So they should allow sellers to promote for larger work away from there. Have sellers pay a fee, but get real on this issue, Fiverr.

    • profile image

      anonymous 5 years ago

      Nice info here, well done! SQuidlike

    • atticanibal profile image

      atticanibal 5 years ago

      Yes it is true that they take some of your money but you have to take in consideration the fact that they have to keep the siteworking they have to pay the people working for the site and the dude has to make a living so he doessnt have to get a 9 to 5 job and there would be no more fiverr .

      Also when you sign up and find out about the site you know your only doing business for $ 5 so you limit it to what you are willing to do for it .

      Also if it wasnt for it you wouldnt have ANY income , i persoanly made almost $ 2 000 , now ofcourse if they would have taken some of it i would have a lot more , but also if it wasnt for fiverr id have a big ZERO .

      In my opinion fiverr does a great job and i love the site :)

    • profile image

      anonymous 5 years ago

      As a seller on Fiverr I know your frustrations all too well. Especially with the recent site updates that made me wait an additional week for my payments really took the cake with me. I really don't like them and would love to move to a better alternative like fiverr but there is none at the moment. Just like ebay is king for online auctions, Fiverr is top dog for micro jobs and if you are a seller there you are stuck

    • profile image

      webdevelopmentservices 5 years ago

      No Doubt every Freelancing platform charge their price with certain rate. But We should say that Fiverr is charging a lot more higher as compare to others. At least it should not charge that much.

    • samuelelleswanson profile image
      Author

      Sam Swanson 5 years ago

      @iWriteaLot: Hi Donna,

      I appreciate the comments. I DO realize how great of a resource Fiverr is - to date I have made nearly $1,400 with the site and have had these contacts become actual clients for my more comprehensive services. This is in fact the main reason I offer fiverrs. I of course have bought many gigs as well. Some duds, but many great offerings. My relationship with fiverr is love-hate, because they do offer excellent, targeted exposure, but at the same time, the points in the article bring up huge issues I have with the site. Of course all sites like elance or odesk have fees as well, as they should, but not near 20%. I'm hoping overtime, Fiverr changes its percentages, especially regarding multiple orders and gig extras. The idea of the site really is groundbreaking and the structure is constantly improving, but I think its important they address these issues.

    • iWriteaLot profile image

      iWriteaLot 5 years ago

      Every site you work with online has some type of limits - even Squidoo. And all freelancing sites have some type of fee involved. They're not taking a percentage of your income - it's the cost of doing business with that site. Granted there are a lot of freelancing sites out there that pass you the funds as soon as the transaction is completed, but those sites also have much stricter controls than Fiverr does and often the fees are higher, too. And as for prohibiting business growth - first, there are an awful lot of Fiverr sellers who will disagree with you on that one, myself included. And all freelance sites prohibit off-site contact and links. Where there's a will there's a way. I'm sorry. I rarely leave this type of comment. But you've linked to a lot of my own Fiverr lenses and your contact button on your profile isn't enabled. I appreciate the links but I'd much rather they were coming from a source that understands how valuable Fiverr is as a business resource. Not someone who's just trying to grab some traffic.

    • Gypzeerose profile image

      Rose Jones 5 years ago

      Interesting points, I like the freedom that Fiverr offers to make a quick buck, but I agree as a business building tool it has real limits.