The Secret to Making Money on Fiverr

US News

The website Fiverr.com offers an enticing proposition to users: Buy (or sell) any service for $5 a pop. There's no need to negotiate pricing or to fret too much about hiring the right person for an extended job. If you're a small business with the need to offload some short-term work, such as graphic design or copyediting, you can find a willing worker with a few clicks.

Micha Kaufman, co-founder and chief executive of Fiverr, says simplicity was his original goal when he and his co-founder launched the site in early 2010. "Today, everyone has a talent that someone else needs. [We thought], 'How cool would it be to put these amazing talents together in one place?'" While other freelance marketplaces were more onerous, requiring price negotiation and back-and-forth to define the scope of work, Kaufman says at Fiverr, the initial focus on a single price point ($5) takes that complexity out of the equation. "Buying shouldn't take more than 20 to 30 seconds," he says.

Kaufman says the sticky price point is good for sellers, too, because it prevents them from being forced to compete with cheaper offers. "They can do five to 10 [gigs] an hour, and it adds up to a nice income," he says.

Today, Fiverr has expanded rapidly, with 1.9 million gigs listed and 4,000 new services, across 120 categories, added each day. Just over half the transactions are between $10 and $100 now, thanks to the growth in "premium" gigs, where advanced sellers can augment their services, which can now sell for as much as $500. "That's how they can achieve financial independence on their own terms," Kaufman says.

[Read: Why You Should Launch a Side-Gig Now.]

It's how Morissa Schwartz, a college student at Drew University who lives in Woodbridge, N.J., started paying for her college-related expenses. She originally joined the site to offer her singing services, but then started noticing requests for copyediting help. As a writer, she figured it would be easy to edit in her free time, so she began offering her proofreading services on Fiverr.

Schwartz now edits 2,500 words for $5 each when she's not busy with her school work. She charges extra for formatting, editorial critiques and a 24-hour turnaround time. "Self-publishing is so big, so it's a perfect way for [those authors] to get their book edited in a more affordable way, and I get the experience," she says. Schwartz estimates she spends about three to four hours a day editing, and she earned $7,500 in the past year from her efforts.

Mark Mason, a semi-retired publicist in Chicago, has found similar success by offering business-related services through Fiverr, including writing email auto-responders and marketing materials. "Fiverr for me was a fresh new marketplace that was bringing in buyers," he says. He quickly started earning $150 to $300 a day by working around three to four hours. That income allowed him to buy a new home in Indiana.

"It fits my semi-retired life and keeps my skills sharp," Mason says. He also enjoys interacting with the Fiverr community, which helped him earn his status as a top-rated seller.

[Read: The Future of Freelancing.]

Mason recommends newbie sellers start with $5 gigs to test the market, and then slowly build up steam - and ratchet up their pricing - as they build their reputation on the site. Sellers who are starting out must be on the site for 30 days and successfully complete 10 orders before getting "promoted" to level one, which allows them to start offering gigs for more than $5. (Sellers join the site for free, and they keep $4 out of every $5 gig they sell. If buyers aren't satisfied with their purchase, then they can visit the Fiverr "resolution center" to get help working out a solution with the seller, or to reject the work and not pay for it.)

[See: 50 Smart Money Moves.]

In addition to his role as chief executive, Kaufman is also growing the site as a user, on both the selling and buying side. "I buy a lot of gifts, like graphic designs made out of photos of my family. People turn photos into amazing illustrations," he says. As a seller, he has offered to listen to people's elevator pitches and provide feedback.

But when he has offered business services in the past, he hasn't done it under his own name. If he did, he could probably charge a lot more than $5.



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