How Does Fiverr Work And How To Make Money On It?

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Are you looking for a way to earn money online? Fiverr is a website that offers freelancers and small business owners an opportunity to sell their services on the web. 

It has well over  4.2 million sellers, selling everything from marketing and graphic design to writing articles and translating documents into English or Spanish. Many of these people are trying to make a living as artists, writers, developers or just starting out in their field. 

Today I'm answering your Google search for "how does Fiverr work" while giving you tips to succeed on the platform.

If you've already decided to try Fiverr, just click the button below.

What is Fiverr?

Fiverr is a platform where you can market yourself and your skills online for a fee. The site charges a commission of 20% for every offer that is successfully completed. It was launched in February 2010 and they have since grown to over 1 million users worldwide. You can sell pretty much anything on Fiverr, including music, writing, design work and marketing services.

How Does Fiverr Work And How To Make Money On It_

So is it like a marketplace? It's more of a marketplace than anything else.

The site makes it easy to find services you need, but ultimately the seller has to make the deal directly with you and complete your order. There is no middleman here like on eBay or Amazon. Unlike those platforms, Fiverr gives its sellers instant access to their clients.

This means that when someone places an order on Fiverr, they are able to contact the seller immediately, negotiate terms and make modifications if necessary. If you’re looking for alternative platforms that offer marketplace features similar to Fiverr, read the Attrock expert comprehensive list. It helps you know about more freelance marketplaces.

I would have liked to experience the platform back when I was still freelancing. I guess it would have been easier to juggle several orders and not have to deal with clients as much.

I'm not a huge fan of how the site is designed. It's cluttered, it's too colorful and it's pretty poorly optimized for SEO.

On a good day you can make $500 or more on Fiverr depending on what you're offering and how much demand there is for your services. Many sellers have made a decent living there, but it may not be the best choice if you're looking at getting rich quickly or trying to earn extra cash during your free time.  

How does Fiverr work?

The platform makes it really easy to start providing services, but it's not all that easy to make money. Many new sellers set up a profile and just wait for the orders to roll in. They stick around for a few months without making any money and then decide that they can't do it anymore. Most of them end up quitting before they even notice how much money they could have made if only they had done things differently.

What is Fiverr

Sellers have to study their market and know what they are good at. I've seen people claiming expertise in marketing, writing articles or even programming, but make no sales on Fiverr despite being very talented in those areas.

Here's what you'll find on the offers page:

If you have a service to sell, you can create your own offer. The process is very fast and takes just a few moments to complete. Simply fill out the form and upload a file that contains more details about your specific project. The site will automatically display the title, description, price, delivery time and all the relevant information for your potential customers. All you need to do now is create an interesting video introduction that sums up the important details or what this project is all about. It should be short and sweet but make sure people get an idea of what they're getting into when they click on your link.

This text block above is known as "super".

Personally, I think this is a much better way to sell things on Fiverr. The information is clear and concise and I think new visitors will be more likely to click on your profile if you have the right cover text ready.

You can make as many offers as you want, but remember that all of them will be available for everyone to see on the bottom of your profile page which means if you have too many offers, you'll hardly get any views because people will click through useless links or look at your photos instead.

It's a lot like other freelancing platforms. However, there's a certain appeal to it since you're able to hook clients with a low-cost offer before offering your more expensive services. 

How can you make money on it?

I spent a lot of time thinking about why other service providers fail in the marketplace. Typically, there's a lot of earning potential on it. But you need to leverage all your resources and spend some time studying your market in order to make sales.

Here's what I think is the best way to go about it:

Choose the right industry

Choose an industry that you're familiar with. Make sure it has potential because even if you did your homework and know exactly how much money you can make, if it's not a lucrative market, no one will use your services.

Fiverr categories

You have to create and set up your profile so that people can discover you and learn more about what you do. Only when they choose you over other providers are you able to provide your services.

Do all the research beforehand and learn what to expect in terms of competition and pricing. Only then set up a price that is close to industry standards but still slightly below them. You're doing this on purpose because you're trying to get your foot into the door and get more orders. If you start off with a high price, people might not be willing to pay it, even if it's worth it for them. Therefore, start out cheap and increase your rates if people stay loyal to your services.

This is basically the same principle when you niche down. It's important that you decide on what you're going to provide for clients because it will help you determine how much they're willing to pay.

It is also important that you have a unique approach because if there are a lot of similar or even the same services in the same niche then people might be more likely to buy from someone who has something new and different.

Start with inexpensive offers

The whole premise of Fiverr is that clients are able to receive services for as low as $5. You need to leverage this to your advantage. Don't just create an offer for a flat rate or upfront payment. Instead, for example, offer to write a book report and make it $5. If your client accepts the deal, you'll be paid for the work. High commission fees usually work against you because people are much more likely to click on links from low-paying offers than those from higher paying ones.

You'll have to spend some time working on each of your offers as well as finding customers who are looking for these types of services.

Remember that not all of your clients will be happy with the quality and it's important that you set up a process in case they want their money back. It's also important to remember that no one will ever pay you 100% upfront. The trick is to find clients who are willing to wait for their money so you can get started with your money-making.

The more offers you have, the more clients you'll have. You just need to make sure that your services are worth at least $5 so that your services pay for the site's cost and then some.

List as many offers as possible

List for as long as you want. However, keep in mind that your earnings will diminish over time regardless of how many people see your offer. This is why it's better to sell things in batches or when you're getting orders regularly and earning some money from them.

Fiverr gigs offers

Your cost to acquire a client is also one of the most important factors. How quickly you're able to make sales after you do your research on pricing and how much potential there is in your industry will determine how much it's worth for you.

Here's an example: if it takes 5 clicks (clicks referring to pages on the internet) to get a client, then each client will cost you $20 and for every dollar that you make from those referrals, you'll be making $2. If so, that's 20% of what your clients pay for. Therefore, if this is worth it (after allocating some money where needed), then this is an option that will work for you.

Invest some time in creating as many offers as possible and making them appealing so that you can get the most amount of traffic coming to your Fiverr store. Think about what kind of service can you offer for under $5.

Update your profile frequently

Make sure it reflects what you have to offer and how you offer it. Find out who the ideal clientele is for your business and do everything you can to deliver on that promise. Use photos, add videos, hone your skills in writing copy, and connect with the people you will eventually do business with.

Make a great impression through all of this work, so when people come upon your profile they'll have plenty of positive things to say about you. They'll see you as a real person and not just a link on the page or some service that goes for cheap.

There's much more to making money on Fiverr than creating an offer and waiting for buyers to beat the door down. You need to constantly think about how you can improve your profile, make connections with clients and spend time working on each project that's assigned to you.

Get a good overview of the marketplace

There are so many providers on Fiverr and it is hard to stand out if you have a less than desirable profile or ready-made offers. The marketplace is a place where people come for low-cost services so it's important that you make sure that your profile stands out from the rest since you're much more likely to get clicks from new clients if your profile looks appealing and full of information. 

Getting started on Fiverr

It's quite easy to get started on Fiverr. The process is a bit extensive, but it all makes sure that the freelancers are well-vouched for so this should raise your credibility. I quite like the step-by-step process, but it can get a bit confusing. So let me take you through it one by one:

Instead of going through each individual step, let's go into detail on each page. It should be a bit easier to follow then:

Signing up

The first thing you need to do is add your account details. This includes your name and email, as well as a short description of yourself and any additional information about you that you would like potential customers to know. Once that's done, you can create your first Gig.

become a seller on fiverr

This is where people will come in asking for help or services on Fiverr from the outset. Your Gig is completely customizable and you will be able to link up your social media, photo or video accounts. You will also be able to add additional images and videos directly from this page.

Specifying your services

The next step is the most important one: your Gig page. This is where you will fill in your description of the service that you're offering. It needs to be detailed enough for customers to understand what it will entail, but it doesn't have to be too long either. There are two different methods of selling on Fiverr: Fixed Priced or Best Offer.

You can only pick one of these. Whichever one you choose, you will need to set a price for your service that is different from the original $5. You can change your price as often as you like, so if you think the price is too low or too high, adjust it until you feel it's ideal. Once that's done, you can start promoting yourself and your services.

Promoting yourself

After setting up your account, the next step is to spread the word about your business on Fiverr. This requires marketing yourself through social media or similar channels. The more people you can get to pay attention to Fiverr, the more successful your business will be.

promote your fiverr business

The good thing about Fiverr is that it's very simple to find new customers. There are plenty of ways to promote yourself on Fiverr that don't necessarily involve spending money. Let's go through a few of them: 

  • Posting in forums: When you first register your account, your username will be available for others to view on many different forums and sites across the web. This works best when you create an account for yourself and post it on a forum so others can find it and click on your user name when they go to buy services from Fiverr.
  • Reddit: Reddit is another great place to get attention. There are forums for almost every topic under the sun, and you can make new posts with your link to Fiverr wherever you want. This is a great way to get a lot of traffic faster.
  • Parallel Programmers: This is one of my favorite ways to promote myself on Fiverr as it's very cheap in terms of time and money. I've been using ParallelProgrammers for quite a while now and it has paid off nicely for me, both when people buy my services from me on Fiverr as well as when I'm looking for freelancers. It's very simple to use and a link to the service is extremely easy to share.
  • Social Media: Even Facebook and Twitter, both free platforms, can be used to promote your business on Fiverr. Just remember that the more followers you have on these platforms, the more effective it will be. I usually do my social media promotion after making a new post on Reddit or ParallelProgrammers. Again, both are free and very effective.
  • Webinar: If you operate any kind of online business, look into using a webinar for your promotion campaign. This is a fantastic way to reach many people at once and many webinar providers will allow you to create them for free (or at least for a very small fee).

The financial system

Fiverr works in a similar way to eBay where sellers are free to set their own prices. For this reason, there is a huge variety of prices on offer on Fiverr. However, as you are selling your services, you are able to charge customers whatever price you wish and they will be unable to contest the prices which you set.

If a client does not agree with your price then they have the option of choosing another seller. Within the five-dollar bracket is some flexibility with regards to pricing; generally chairs will cost around five dollars, but this may vary depending upon the complexity and work involved.

The main disadvantage of this system is that, if you see something for sale that you like but the seller's price is higher than you're willing to pay, you cannot purchase from them and won't be able to buy it anywhere else.

This is a relatively minor issue, however. If you are looking for a service of any kind then chances are that there are plenty of alternatives to choose from. Also, very often the quality (and therefore price) of services on Fiverr will depend on the experience and reputation of the seller; thus the seller who charges $15 may provide better work than someone charging $10 could manage. 

The main risks and disadvantages of Fiverr

Fiverr is a great platform for freelancers but the same features which make it so successful can also be its downfall.

Unlike PayPal, with no way to monitor transactions or even verify that the money is actually being paid into your account, this can cause quite a few problems. In this regard, Fiverr itself has even started to address these issues with a system whereby you can now take payments via Paypal and have them automatically deposited in your account.

risks and disadvantages of Fiverr

This is simple to implement, but means that you have to install another third party app on your smartphone, and may mean having an additional line of credit on your cards.

There is also concern about reliability on Fiverr. For example, you can no longer contact a seller through the Fiverr website to request a refund or ask for extra work free of charge; all you can do is leave a bad review.

While this may be convenient for an unfamiliar buyer, it can make it difficult to get issues resolved if they arise as opposed to PayPal where the buyer and the seller can normally talk directly.

The cost of quality work can be very high for low-budget freelancers, so the platform can seem quite unappealing to some. This is not Fiverr's fault, but it certainly remains a consideration when thinking about using the platform.

A recent 'blog' from 'Fiverr' that stated that 'we will never ban sellers who sell products or services they don't own' also came under fire from their user base as a possible breach of the terms and conditions they currently have in place.

If this new stance were to be adopted and adhered to by Fiverr it could make the site as a whole less appealing as a marketplace for businesses or freelancers looking to offer original work. 

How much can you make on Fiverr?

So these are my thoughts on Fiverr. It's a great place to start freelancing, build up your portfolio and spread the word about your business. I personally know freelancers who make quite a lot from Fiverr each month, but they've also been working as a freelancer for almost 10 years now. So it depends a lot on your niche and how well you promote yourself through social media, forums etc.

For example, if you can get a good following on Reddit, it may be well worth your while going to this platform. It's free and the potential for promotion is huge.

All in all, Fiverr is a great place for freelancers because of the sheer number of customers who look there first. If you're fairly new to freelancing I would advise using Fiverr as a way to make money while building up your business and portfolio on other platforms. You will also need to take PayPal into consideration when setting prices or using other payment methods since this is no longer available at Fiverr.

I know some people who make upwards of $500 a day on the platform. It's a good place to start earning while you build your digital business. However, you need to put in a significant amount of effort to make sure it works for you.

You'll also need to keep your profile on the up-and-up and make sure it looks as good as possible.  

What’s the easiest way to make money on Fiverr?

I've been using Fiverr for quite a while now and have had a lot of success with it. However, there are ways to make more money on Fiverr faster and I'm going to share them with you today.

fiverr make money with gigs

#1 - Get into private gigs

This is my number 1 tip when it comes to making more money on Fiverr asap. Simply put, private gigs are gigs that you accept and complete without the client being able to review your work. This means that you can get away with lower quality work and deliver much less than if you were rated by the client.

#2 - Use Fiverr coupons

Fiverr also offers coupons for new members who sign up to the platform. So if you're looking to make some money fast, this is a great way to do it. I know that there are different coupons for 5% off on your first purchase, $5 off your first gig and other similar deals.

When you first start using Fiverr, it might be tempting to offer low-quality services for $5. However, the best way to make more money on Fiverr is to build your client base. The more customers you have and the better reputation you have on the platform, the more clients will look to you for help. This means that if you can offer high-quality services for a low price then you'll draw in a lot of customers who are looking for those services. 

Fiverr freelancer fees

When you are hired by someone on Fiverr, your end total will be reduced by the following fees:

Fiverr Fees: $1 (25% of the amount you invoiced)

Paypal Fees: $0.30 (3.4% of the amount you invoiced)

You'll end up only getting approximately 75% of what was originally agreed upon when you first issued your invoice. The 25% fee is taken from both parties in order to keep Fiverr running smoothly.

Fiverr has been criticized for a lack of penalties when it comes to being banned.

Sellers who are banned on Fiverr have to pay a fee on the platform that is equivalent to the amount they made off of selling on Fiverr. To be banned on Fiverr, you need to have some kind of violation. Sellers can be banned for poor conduct, being slow in paying their customers, making false statements about services and selling stolen property or copyrighted items among other things.

As with any marketplace, there are always going to be some sellers who will use improper methods in order to sell their service and make as much money as possible.

As long as these methods are not illegal, sellers are allowed to use anything they like when it comes to advertising their service. However, there should always be some way of identifying these sellers and preventing them from using Fiverr.

There is a lot of controversy surrounding this issue and as such, the Fiverr team has received a lot of criticism for not taking action against sellers who use unapproved methods in order to sell their services on the platform. There have been instances where people have been banned after being accused of selling services that were stolen or censored from public domain content. 

Is Fiverr a good marketplace for freelancers?

Overall, I think you can make a lot of money on the platform if you take the time to market your profile and make it look as professional as possible. Also, if you focus on certain areas of expertise then you'll find that Fiverr can be a great platform to nurture these skills within your business.

With that being said, Fiverr does have a lot of competition when it comes to providing services online. For example, there is UpWork and Freelancer where you can get more serious businesses that are constantly looking for freelancers to handle their business expansion or projects.

You may do better over there if you're looking for more than just a few dollars from a very small project or if you're looking to build up a portfolio. However, if you're just looking to make a few hundred dollars from a single sale then Fiverr is probably your best bet.

Interested in a comparison? Check out my 99designs vs Fiverr article.

About the author 

Peter Keszegh

Most people write this part in the third person but I won't. You're at the right place if you want to start or grow your online business. When I'm not busy scaling up my own or other people' businesses, you'll find me trying out new things and discovering new places. Connect with me on Facebook, just let me know how I can help.

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