How Does Fiverr Work? Should You be a Buyer, a Seller or Both?

Fiverr – pronounced “Five-rr” – is the largest and most popular online marketplace in the world today where self-employed or part-time workers offer freelance services, starting from $5, hence the name. It is the brainchild of Micha Kaufman and Shai Wininger and has its headquarters in Tel Aviv, Israel.

The online marketplace is open to freelancers from all corners of the globe who are skilled enough to offer one service or another to customers worldwide. Fiverr launched its website in 2010. By 2012, more than three million services were showcased on the highly reputable online marketplace.

 

A little Bit of History

Shai Wininger and his partner came up with the concept of providing a two-sided online marketplace where people can purchase or sell an assortment of digital services at the low price of $5. This amount is believed to be reasonably affordable for all and sundry, yet be able to purchase a service of decent quality. This unique selling point caught on immediately in the digital world and launched Fiverr to the top in a matter of months.

Though all the services offered on the platform starts at $5, sellers have the leeway to scale up the amounts up to thousands of dollars. Of course, this means that sellers must be willing to do more than what they offer for just $5. If you’re in doubt if Fiverr is worth it or not, think about it for a second.

Services offered on Fiverr include graphic design, video editing, writing and translation, programming, transcription, digital marketing, etc.

The volume of transaction that has occurred on Fiverr has grown up to 600% since 2011. Furthermore, Fiverr is ranked among the top 100 most popular websites in the United States and among the top 200 most popular in the world since 2013.

Fiverr Homepage as of May 2018

 

Seed Funding

By June 1, 2010, Fiverr had received US$5 million seed investment from Cubit Investments. Almost two years later, precisely in May 2012, Fiverr was able to secure another funding from Bessemer Venture Partners and Accel Partners to the tune of US$15 million. The organization’s total funding adds up to US$20 million.

Fiverr launched its app in December 2013 on the iOS platform. Users of Fiverr were able to download the app from the Apple App Store for use. By March 2014, the Android version of the Fiverr app was launched on Google Play Store.

Fiverr was able to raise another US$30 million by August 2014 via a Series C round of funding from Accel (formerly called Accel Partners), Bessemer Venture Partners and other investors. This brought the total amount of money used to fund the platform to US$50 million.

Fiverr announced in November 2015 that it had raised up to US$60 million is another round of funding – Series D – spearheaded by Square Peg Capital. This has brought the total funding to US$110 million. The company also announced its next agenda: expansion of the marketplace so that sellers on the platform can offer high-priced but productized services to buyers.

Fiverr currently has more than five million “gigs” or services hosted on its website and has a thriving community made mostly of sellers and a few buyers.

Fiverr is responsible for hosting sellers’ services, driving traffic of buyers as well as creating an enabling platform or both buyers and sellers. For every sale on the platform, Fiverr takes a 20% commission. That means for every $5 spent by a buyer to purchase a digital service, Fiverr takes $1 and the seller is left with $4.

 

Glossary of Terms

When you visit the Fiverr website at www.fiverr.com, you may come across some strange words like “gig,” “gig extras,” etc. This section will highlight the meaning of these terms so that you can get up to speed when the time comes for you to use the platform as a new user.

 

Gig

This refers to the service listed by any freelancer on the Fiverr platform. For example, you will see services written thus: “I Will Make a Simple Edit For Your Video for $5,” “I will build a WordPress website for $5,” “I will create a basic eCover for your eBook for $5,” etc. However, if you need to purchase premium services, they usually cost way more than $5. Most sellers offer premium services via what is called “Gig Extras.” So, for instance, a seller offering a service such as “I will make a simple edit for your video for $5,” a gig extra may be something like this: “I will create and add subtitles to your video for $25.” Another gig extra could be “I will transcribe your video for $15,” etc.

 

Buyer

This is the user or individual who needs something done for him/her and is willing to pay for the service. Buyers are the backbone of business on Fiverr: without people willing to spend money for digital services, Fiverr will run out of business. This is why the term “Buyer is king” is popular in the Fiverr community.

The sheer number of gigs on Fiverr is more than enough to discourage a prospective buyer, that is if you are in a hurry. In this case, it is wise to make the sellers approach you as the buyer. This is possible by the use of the “Buyer Requests” section. Here, all buyers need to do is to list the services that you want to be done for you in the appropriate categories. Then sit back and wait: sellers will contact them to pitch their services. It is now left for buyers to go through their gigs and find the one that matches their desires.

In case a buyer has issues with a seller, such a buyer can go to the Resolution Center to sort things out with the seller.

 

Seller

This is a user or freelancer that sells his expertise on the Fiverr platform for amounts starting from $5. A seller must have a sellable skill such as graphic design, writing, video editing, etc. and must be willing to work or provide prompt service for $5 or more.

Sellers are grouped into several categories or levels, depending on several factors such as the number of positive reviews, amount of work done within a stipulated time, promptness in responding to queries from potential buyers, etc. Entry level sellers are given “Level 0,” and have a limited number of gigs to display. To move from that level to “Level 1,” a seller must complete a particular amount of tasks or orders (more on that in a few minutes) within 30 days. The deliveries must be prompt and with a high response rate and a clean sheet devoid of cancellation of orders or other misdemeanors.

Statuses or levels “1,” and “2” are where a vast majority of sellers on the platform are while the Top Rated Sellers are hand-picked by the Fiverr team based on recommendations from buyers and impeccable track record of responsiveness to buyers, prompt deliveries, reputation, performance, etc.

Take note that as a seller, you can be demoted at any time if you go against Fiverr terms and conditions, have a record of order cancellations, low response rate or late order deliveries. To regain that level, sellers may have to work hard for the next month or two and must maintain clean records the entire time.

Sellers must deliver the completed orders or files or proof of work done via the green “Deliver Work” button which can only be accessed on the Order page.

 

Order

This is the entire set of instructions that a buyer submits to a seller as regards the service he/she wants to be done. Buyers can place orders, one at a time or place multiple orders, depending on their wants or needs.

A seller usually has some requirements or questions that the buyer must answer so that the seller can be fully intimated on the needs of the client. If the buyer neglects to answer the questions or submit the needed requirements, the order may be on hold. Additionally, buyers should also take note that the orders will not be created until payment is done and confirmed. That means buyers must pay in advance before the order is initiated or created. Then a unique Fiverr order number is assigned to it. (#FO).

An order can be canceled if it is not fulfilled on time or if the seller defaults in one way or another. When this happens, funds will be returned to the buyer without any hassles while the seller may be assigned a red flag for defaulting. Frequent cancellations of orders can affect a seller’s status and reputation poorly.

When an order is delivered and rated by the buyer, it is marked “Complete.” If, however, the order has been delivered but there is no request for modification from the buyer or a rating, the order will be automatically marked complete.

 

Order in Queue

This is the number of orders that a seller is currently handling. This is an indication that lots of buyers have paid for the services of a particular seller and are waiting for their deliveries.

 

fiverr order completed page
Order Completed

 

Package

Some sellers offer their services in “Packages” which come in a variety of formats and prices. Packages usually include upgrades and allow sellers to price their services starting from $5.

 

Revision

This is a request that is initiated by a buyer if the delivered order is unsatisfactory. In this case, the seller is expected to take note of what needs to be modified or done until the buyer is satisfied and willing to leave a good feedback about the services rendered.

 

How Fiverr Works from a Buyer’s POV

Signing Up

This is the first thing every user of this platform must do. The signing up process is pretty straightforward: click the “Join” button located at the upper right-hand corner on the main website www.fiverr.com then, enter your preferred username, password, and email address. A confirmation email will be sent to your email address which you will click and voilà! You are up and ready to use the platform.

 

Finding a Service

Fiverr WordPress Gigs

You will find some gigs featured on the homepage on Fiverr. The gigs are randomly selected from different categories and shown on the homepage so that buyers will not waste any time to find a seller and to place an order. The homepage is refreshed every few hours so that other gigs can be featured as well.

But in some cases, however, the service a buyer is in need of may not be featured on the homepage. All the buyer needs to do is to locate the Fiverr search box with these words “Find Services” printed lightly. Then type in whatever service you are looking for, press the green “Search” tab. A full gallery of gigs about the service you are looking for show up.

You can then start using other parameters of your choice like seller “Levels,” “24-hour delivery,” etc. to ferret out the seller you will like to work with. You can also save yourself a lot of time by using the Buyers Request section and wait for competent sellers to contact you.

 

Placing an Order

Placing an order on Fiverr is not rocket science. Just make sure that you have enough funds to cover the payment for the service you are looking for in your PayPal account. You can also make payments via a credit card as well as through Fiverr Credit. As soon as you locate a seller of your choice, contact the freelancer via the secure chat platform provided on Fiverr. Most sellers have the Fiverr app installed on their mobile devices and will typically respond very fast. You will also have the opportunity of going through the seller’s profile to get a feel for what he/she does, their response rates, orders in queue, and reviews left by previous buyers.

This will give you enough information about the competence of the seller you have decided to work with.

Then after contacting the seller and both of you reach a mutual agreement about the service to be rendered, click the green “Order Now” tab for the amount discussed and pay for the service in advance.
You don’t need to worry; Fiverr acts as an escrow between you and the seller. That means your funds will not be released to the seller until your order has been delivered and you find it satisfactory after which you will mark the job “Complete.”

Furthermore, you also need not be afraid of your credit card details being jeopardized. Fiverr is one of the most secured websites in the world and will never divulge your financial details to any third party no matter what. Fiverr does not collect credit information. But they permit their payment vendors to collect the needed information for accepting payments from buyers on the site or for transferring payments to sellers on the platform. Fiverr is not, in any way exposed to your payment information as made available by their payment vendors.

As long as you are making use of the Fiverr platform to purchase services, all payments must be made via the website. In case any seller asks that you make payments using alternative methods not supplied or supported by Fiverr, please contact the Customer Support team.

If you happen to have some funds in your account balance, especially from your Shopping balance, it will be applied automatically to your next purchase.

The opportunity to pay for services on Fiverr using local currency is only available in a few selected countries around the world. Take note, however, that the local pricing of any gig on the Fiverr site is a direct conversion of its original price in USD. Therefore, local currency prices are subject to change on a daily basis, depending on the prevailing exchange rates.

 

What to Expect

As mentioned earlier, all the prices of gigs on the Fiverr platform start from $5 or very low. Therefore, you should not expect any service of high quality for such a paltry sum. You get what you pay for. So your expectations must not be high for such low-ticket gigs.

However, when you purchase $5 gigs, you will get an inkling of what you can have if you go for high-priced gigs. Gigs with premium prices come with high quality, so you must be willing to pay more.

 

 

Key Points to Have In Mind with Fiverr As a Buyer

One common mistake that buyers make as soon as they come on Fiverr is to place an order for a straightaway without communicating with the seller. This may lead to a disappointing outcome since the seller has no way of knowing your expectations.

The best way to ensure that the seller delivers what you paid for is to contact the seller before you place the order. Thanks to the Fiverr app, most of the savvy sellers are logged on to the platform 24/7. The chat between you and the seller will never be disclosed to a third party, and everything you discuss remains confidential. Only when you are sure that the seller is on the same page with you, fully understands your needs or requirements, should you proceed to place an order.

To save your time and to avoid disappointment, try and contact two or three sellers at the same time and with the same requirements. You should take note of their responses, how fast they reply messages and use your discretion to gauge the level of competence.

Thirdly, you should consider patronizing new sellers (Level “0”), Levels “1”, and “2.” The new sellers do not have any reviews to prove their level of proficiency and find it difficult to get their first sale. Do not be afraid to try them out; since you may probably be their first client, they will be super eager to please you. They will be more than willing to do anything you tell them to do to secure your trust. Nevertheless, you should still be wary because some of them may not meet your requirements.

Sellers that have tons of orders in queue show that they are not only proficient but have lots of work to do. Even if you contact sellers in this category and they respond, it will take a while before they deliver your order, unless you pay for “Express Delivery” services.

Some sellers with lots of orders tend to deliver shoddy work, just in a bid to beat deadlines. So use your sense of judgment to select any freelancer that has the experience and qualifications to deliver high-quality work.

 

Fiverr Fees

Buyers are charged processing fees as at the time of purchase. As of July 2016, the current fees assessed to the entire purchase amount are just $1 for purchases up to $20. Purchases above $20 come with a 5% processing fee.

Buyers may also be charged with “indirect” taxes such as GST or VAT, though this depends on their location, residency, and other applicable laws. This is in addition to the price of the gig displayed on the Gig page.

 

 

The Fiverr Experience as a Seller

Some sellers on this platform have had tremendous successes over the years. Many started as part-time freelancers and when the income made per month improved, they quit their 9-to-5 jobs and worked full-time on Fiverr. 

 

When Fiverr started, the platform had fewer sellers, and it was very easy to make a quick buck, offering digital services. But as it gained popularity and transformed from one version to another, lots of freelancers thronged the site, offering a variety of services to buyers.

The first few days or weeks as a seller could be difficult, depending on the type of service a freelancer is selling. Prospective buyers hesitate to use new sellers on Fiverr seeing as they do not have any review from a previous buyer to indicate the level of competence the buyer has. This can make a seller to be desperate and even offer premium services for $5, just to catch the attention of potential buyers.

But once this hurdle is crossed, and a buyer takes a chance and orders a gig, and the freelancer is able to deliver high-quality work, the buyer is pleased. Such buyers leave glowing reviews for other potential buyers to see and may even come back for a repeat or fresh service.

Sellers also have the option of advertising their gigs on social media platforms so that potential customers can see what they are offering and patronize them. Sellers can also purchase services from other sellers using whatever amount of money they have earned on the platform.

Sellers are categorized as follows:

  • Level “0” sellers i.e. sellers without a level status: 7 gigs
  • Level 1 sellers: 10 gigs
  • Level 2: 20 gigs
  • Top Rated Sellers: 30 gigs.

 

Sellers from Level “0” to Level “2” must wait for 14 days for cashing out their revenue earned on Fiverr. This is one of the major problems that sellers have, besides battling with some buyers that make unrealistic demands for $5. Top Rated Sellers, on the other hand, can withdraw their earnings after 7 days.

For sellers without a level status to be promoted to Level “1,” they need to make a minimum of 10 sales with impeccable records within 30 days i.e. one month. That means such a seller must complete and deliver at least a minimum of 10 orders within the stipulated delivery period. The seller must also receive glowing recommendations from the buyers that ordered for his services. There must be no cancellation of orders during this period.

To earn a Level “2” status, sellers must deliver at least 50 orders with no record of order cancellation or late deliveries. The Top Rated Seller status is attained when you have maintained a record that is above reproach for some weeks or months. The status is subject to selection by the Fiverr administrators and recommendations from previous and satisfied buyers. There are records of sellers attaining the Top Rated Seller status within three months. Pretty impressive, I would say!

 

Wrapping Up

So, that is how Fiverr works. Whether as a buyer or seller, Fiverr is a wonderful platform to use and so user-friendly compared to other freelance sites out there. Therefore, hop on the train and be part of this remarkable online marketplace called Fiverr.

[Total: 1    Average: 5/5]

Madalin Tudose

I`m a web developer. I build HTML Templates and WordPress Themes which are eventually released on ThemeForest under the DeliciousThemes brand.