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Fiverr is a marketplace that was founded in 2010 by Micha Kaufman and Shai Wininger.
It was a platform specially designed to connect small businesses with freelancers.
Fiverr’s mission statement is really simple: “Our purpose is to transform the way the world works together.”
So how popular is Fiverr really?
Well, if you head over to Google Trends you will get this:
As you can see, Fiverr has been growing over time and is one of the favorite platforms for both buyers and sellers on the internet.
What is Fiverr?
Fiverr is a global marketplace for professional services. Offering a variety of services, from Logo Design and Web Design to Social Media Management, Blog Writing, and Virtual Assistant Services, Fiverr is the place to discover and hire top-quality experts at a fraction of the cost.
Unlike other services, Fiverr offers a money-back guarantee on all services, so you can get an answer or a fix within an hour, or you can get your money back. No questions asked.
They currently have over 2 million gigs on offer.
You can use your Fiverr account for free, but if you want to make money, you’ll need to upgrade to a Pro account.
The Pro account comes with a lot more features, like being able to customize your gigs and add notes to your orders.
How Does Fiverr Make Money?
Fiverr makes money primarily through transaction-based fees. It means that they charge a 5% service fee. Fiverr also makes money by selling professional courses on its website.
1. Taking a commission on each transaction
Fiverr makes money by charging buyers a portion of every successful transaction made on its platform. There will be a set charge of 20% that sellers must pay.
The fees that Fiverr charges its merchants for each transaction made on the network are its main source of income. To be precise, it costs the seller a flat 20% fee for arranging the deal with the buyer.
For instance, here is how much Fiver charges sellers for a gig:
|Gig Price||Revenue For Fiverr after the order is completed|
2. Selling professional courses
Fiverr also makes money by selling professional courses on its website.
Here is how much you can pay for a course on a platform:
Fiverr Business Model
Fiverr’s business model is really simple.
It operates on a two-sided marketplace concept where it brings freelancers (sellers) and businesses (Buyers) to engage in a business transaction.
The main services on Fiverr are digital services that can be completed remotely. These services include graphic design, logo design, blog articles, and many more.
If you are curious about the income potential for the Fiverr gigs, then here is a list of the gigs on Fiverr that tend to generate a lot of revenue:
|Fiverr Gig||Income Potential/Year|
|Proofreading||$50,000 – $75,000|
|Design book covers||$30,000 – $110,000|
|Playing Games||$25,000 – $105,000|
|Logo Designing||$31,000 – $101,000|
|Virtual Assistant||$31,000 – $115,000|
|Digital Marketing||$41,000 – $80,000|
|Content writer||$33,000 – $105,000|
|Writing comments on blogs||$24,000 – $50,000|
|SEO Consultant||$75,000 – $120,000|
|WordPress Website Builder||$45,000 – $100,000|
|Social media manager||$34,000 – $90,000|
|Resume writing||$36,000 – $69,000|
|Building Dropshipping Store||$60,000 – $80,000|
|Video Animation||$40,000 – $100,000|
|White Board animator||$41,000 – $80,000|
|Voice-over artist||$29,000 – $135,000|
|Photoshop editing||$30,000 – $65,000|
|Sales Funnel Creator||$33,000 – $114,000|
|Illustrator||$39,000 – $90,000|
|Language Translator||$35,000 – $80,000|
|Canva Designer||$54,000 – $128,000|
|Diet Plan||$30,000 – $80,000|
|Video Tutorials||$50,000 – $105,000|
|Language Teacher||$22,000 – $60,000|
|Pinterest Virtual Assistant||$23,000 – $96,000|
That being said, let’s elaborate more on the Fiverr Business Model:
1. The seller
A seller is a registered user who provides services to those who submit projects on the marketplace.
Sellers can either be individuals or small businesses who provide services on the platform.
If you are someone who is looking to become a seller, then here is how you can get started on Fiverr even if you don’t have any experience.
You can also choose to become a small business owner by reselling Fiverr services to others.
This is a really simple business model that many people are using to make money on the platform.
You can read my detailed guide that will help you become a reseller on Fiverr.
2. The buyer
The buyer is the one who is paying for the service. They are the ones who are submitting the projects and they are also the most critical people on the platform.
This is because without them, there will be no transactions and no money will be generated.
3. Submit a request
Any registered user can submit a request (same as submitting a project).
When the request is submitted, the submitters have the option to include specifics about the type of work they are looking for.
Here is how you can submit a project:
-Log in > Profile picture > Post a Request (from the drop-down menu)
–Description > Give a brief explanation of the service you’re searching for
Example: If you’re looking for a logo, you can specify your company name, business type, preferred color, etc. You can attach a file but note that you can only attach files up to 5 GB
-Select the category and subcategory (Some categories, require additional information/ criteria)
Example: If you’re looking for a logo, choose “Logo Design” within the “Graphics & Design” category.
-Select when you’d like your service delivered: 24 Hours, 3 Days, 7 Days, or Other—Specify a delivery time between 1 and 90 days
-Add your budget > Post
Note: Once submitted, a Buyer Request can’t be edited—only deleted. So be sure to check every detail before submitting.
4. Fiverr Gig
The service you offer and sell within the marketplace is termed a “Gig.”
5. Gig Extras
As the name implies, Gig Extras are the additional funds that a seller or buyer pays to have additional labor completed.
For instance, if a customer pays $10 for 500 words of content, he must pay an additional $20 to the seller to obtain a total of 1000 words.
6. Gig multiples:
This refers to the ability to re-order your gig multiple times. The number of Gig Multiples increases as the seller’s level increases
Benefits of a Fiverr pro account
Though a Fiverr pro account can help you get success earlier than most people, it doesn’t mean you absolutely need to have one.
But before we proceed further, I would like to list the benefits of having a Fiverr pro account.
1. Fiverr pro gigs get better exposure
Whenever a buyer needs to find a freelancer, he will search Fiverr for the service he is looking for.
Now, on the Fiverr search result, preferable is given to sellers with a pro account.
2. You will get your earnings faster
Freelancers often claim that it takes a lot of time to get their money. Usually, a seller will receive payment after 14 days after the order is marked as completed.
However, if you have a pro account, you will get your money faster( Within 7 days)
3. You will be able to charge more for your gigs
When you have a pro account, you will be able to charge up to $10,000 for a single gig and $50,000 for customer requests.
4. You will get dedicated support
With a Fiverr pro account, you will have a dedicated customer success manager who will help you with any issues you may have.
The manager will also advise you on how to improve your service and how to get more sellers.
This is something that is specially reserved for pro accounts.
5. Get access to better buyers
Buyers who have long-term projects and enough budget will usually hire a pro freelancer.
This is because they will have to be sure about the seller and the quality of work that they will get.
Credibility is very important for a buyer.
Who are Fiverr customers?
Over the years, Fiverr has built a large network of users and merchants, who have been making millions of dollars worth of transactions on the platform.
In total, the platform has facilitated over 50 million transactions, generating over $200 million in revenue.
The revenue of Fiverr is generated by charging sellers a fee for each transaction that is made on the platform.
The price that Fiverr charges its merchants for each transaction made on the network is its main source of income. To be precise, it costs the seller a flat 20% fee for arranging the deal with the buyer. What is the Valuation of Fiverr?
What is the Funding and Valuation of Fiverr?
Fiverr raised a $33.8 million Series B led by Madrona Venture Group, with participation from existing investors Accel, Social+Capitalism, and Founders Fund.
Each of those firms has a track record of investing in digital companies, and they all saw a need in a niche that didn’t currently have a strong competitor.
As of August 2022, Fiverr has a market cap of $1.30 Billion.
Final Thoughts: The Honest Truth About How Fiverr Makes Money
As you can see, Fiverr makes money mainly by charging a fee for each transaction and by selling professional courses on its platform.
If ever you want to make money with Fiverr you can either resell gigs, provide freelancing services or you can also apply for their affiliate program that will help you make money as an affiliate marketer.
If you are new to Fiverr, then here are a few resources that will help you a lot:
- 14 Super Easy High Demand Low Competition Fiverr Gigs.
- 25 Best Fiverr Gigs That Will Make You Money
- 7 Secrets To Getting More Orders On Fiverr
- 10 Amazing Fiverr Typing Jobs That You Can Start Today
- 7 Killer Tips To Get Your First Order On Fiverr in Record Time
- How Fiverr Works For Freelancers-Free Guide