Thursday, July 25, 2024
Business

How Fiverr Makes Money in 2022? Fiverr Business Model

It’s going to be a freelancing world or gig economy in the near future. What do you say? 

I hope you have already heard about Fiverr and know what it is. If not, let me explain a little about the platform before we dig into how Fiverr makes money.

What is Fiverr?

Fiverr is the world’s number one online marketplace to get freelance services for businesses all around the world. 

Fiverr is a great opportunity for people who have some extra time on their hands so that they can offer their expert skills to make some really handsome cash!

You can check the interest of the term Fiverr from the last 5 years. It has grown rapidly.

fiverr interest over time

Did You know?

“As of 2022, Fiverr has a whopping 4.1 Million active buyers”

If you hate the typical 9-5 job, then Fiverr can definitely help you to become your own boss, working on your own times and terms.

Your talent might be anything like marketing, programming, graphic designing, writing, video editing, business consulting or anything which can be done online, Fiverr has the work for you to make money online.

Fiverr business model
Source: Fiverr

Fiverr App has 10M+ downloads on the playstore! And not to mention, the impact of Covid-19 has made the platform rise even bigger.

How Fiverr Started?

Fiverr was founded in the year 2010 by Micha Kaufman and Shai Wininger and its headquarters is located in Israel.

At present, Micha Kaufman is the Chief Executive Officer (CEO) of Fiverr. Kaufman wanted to provide an alternative solution for the normal 9 to 5 job (as they say). 

Before starting Fiverr, Micha Kaufman had launched several other companies which got him a lot of knowledge and understanding on running a business, learning from success and failures.

He observed how eCommerce platforms work and questioned himself why not create an online marketplace to sell skills online? 

So the idea flashed in his big brain to start an online platform where sellers and buyers will get what they need without stepping out of the home. And it worked great as we all know now how big a platform Fiverr is!

Fiverr which was started with just 8 service categories now has more than 500 service categories!

One good about Fiverr is that you don’t need any prerequisites to become a seller on Fiverr. If you have talent, Fiverr has work for you.

If your business is on a tight budget and having tuff time paying for the full-time employees, then you can get that work done in a pretty affordable way via Fiverr. 

Because as there are lots of competition on Fiverr, you may find some affordable but quality work!

So now you know what Fiverr is, let’s move on to the business model of Fiverr.

Fiverr Business Model

There are 3 players in the Fiverr business model. The seller, buyer, and the Fiverr App/website. Fiverr acts as a middleman between the seller and buyer. 

It will help sellers and buyers to connect with each other, hustle-free. You don’t have to run around searching for a freelancer to work for you!

Fiverr business model is a commission-based business model where Fiverr charges a certain amount of commission from both buyers and sellers. 

As Fiverr needs to concentrate on bringing both buyers and sellers to its platform, the model will come under 2 sided marketplace model.

With that, let’s understand how exactly Fiverr makes money.

How Fiverr Makes Money?

There are several through which Fiverr generates its revenue and it’s not just limited to the commission. Let’s check out each one of them. 

Commission From Sellers

Fiverr charges a 20% commission from whatever the money is earned by the seller. Commission from sellers is Fiverr’s main source of income. For example, if you sell a gig for $100 then Fiverr will get a commission of $20. This is the main strategy by which Fiverr makes money.

Service Fee From Buyers

Fiverr also earns money from buyers by charging them a little fee as the service charge. A service fee will be added to the actual amount during the checkout process.

how fiverr earns money

For the services under $5 a service fee of around 2.3$ is charged (as of now) and for services above $5, a service fee of 5.5% will be charged (as of March 2021). 

In 2018, it was 5%; Looks like Fiverr is looking to generate more revenue.

Fiverr Elevate

So what is Fiverr elevate? Fiverr elevate provides individual entrepreneurs to work smarter by taking their business to next level. Fiverr elevate has short video courses on banking, tax advice, health insurance, retirement, and more.

Fiverr revenue model

Fiverr has partnered with few companies by promoting their business and this also adds to the revenue of Fiverr.

Fiverr Logo Maker

Fiverr’s logo maker is an AI-based DIY logo maker so that anyone can make a logo within few minutes. It is free to make and customize the logo but you have to buy a branding package to download the logo.

how does fiverr make money

Learn From Fiverr

Fiverr offers their freelancers to learn on-demand skills in various fields from the top industry experts. By learning these courses you can showcase that as a badge on your Fiverr profile.

These courses thought by the industry experts will have a revenue share program with Fiverr. So that way, Fiverr will earn money from this.

Promoted Gigs

Fiverr also gives the option for their freelancers to promote their gigs to make more sales. You can create your Ad on Fiverr to boost your visibility and grow your business. 

Your gigs will show up on top of search results when a buyer searches for a particular service. It works just like Google search ads. Thereby promoted gigs makes it to the income sources of Fiverr.

Fiverr has acquired Clearvoice, and.co, VeedMe which also adds to the revenue of Fiverr. Acquiring other companies will help a business to scale, reduce costs, offer new features, and to gain a greater market share.

Fiverr is funded by 7 investors with 6 rounds and has raised $111M till now. In 2019, Fiverr went public pricing its IPO at $26.

Features of Fiverr

Here are some top features of Fiverr:

Wide Range of Categories

There are around 500 categories in Fiverr. So a person with any kind of talent which can be done online is available on Fiverr.

Fiverr Pro

Fiverr Pro is basically for people who have more experience in the field of their expertise so that they can get more exposure and more opportunities to make more money. 

It also helps buyers to filter out and choose the one with great talent who can provide quality work. 

But that’s not easy to become a Fiverr pro, you need to go through a rigorous process where your skills will be evaluated by Fiverr. If you pass, you’ll get a pro badge on your Fiverr profile.

Fiverr Studios

If you think Fiverr is only about individual freelancers, well that’s not it. If you have a complex project, Fiverr Studios will help you out. 

Fiverr studios will have a team of specialists in each subject matter to help you with your entire complex project.

Fiverr Forum

Fiverr also has a forum page on their website where people can ask questions about their problems, discuss Fiverr experiences, get Fiverr tips, and more!

Affordable Service

Fiverr’s gigs start from as low as $5. Buyers don’t have to invest high to get things done and usually people just starting out on Fiverr will keep their price low even though they have a good experience. 

So this helps buyers to get things done at an affordable rate and also for sellers to get some experience and positive reviews on Fiverr to grow further.

Fiverr Interface

The interface of Fiverr is very satisfying and clean in both the website and the Fiverr app. 

It is very user-friendly and even if you visit the website for the first time you will come to exactly where to click and what to do in a matter of moment.

Personalized Discovery Feature

Fiverr has recently introduced (Dec 2021) a new discovery feature known as Inspire. This feature by Fiverr is only applicable on mobo devices.

This new Inspire feature will mainly help the freelancers to showcase their work and it is personalized based on each customer. Customers of Fiverr has the option to like those and also they can save it for for future reference by adding it to the list. This feature may just help freelancers to get more work and indirectly helping Fiverr to make more money!

Some other features include a secure payment gateway, rating and reviews, multiple payment methods, messaging, etc. I must say Fiverr has great features for both buyers and sellers!

Final Thoughts

It’s about establishing a business and becoming the market leader in it and Fiverr has done it. The business idea of Fiverr was innovative and the simple way to make money online attracted many people to use Fiverr.

Go ahead, let us know what you think about Fiverr’s business model or if I missed out on any other ways through which Fiverr makes money.

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