Business·Opinion

Fiverr.com racks up sales, $5 at a time

A website called Fiverr features sellers that offer services for five dollars that range from the truly wacky to the downright useful.

It's got to be one of the crazier internet-based businesses out there.

A website called Fiverr — yes with two Rs — features sellers that offer services for five dollars. 

Those services range from the truly wacky, such as "I will send you a photo of my adorable kitten posing with a message of your choosing," to the apparently useful, "I will design and print a custom button for your website or business."

And although it's still not widely known in Canada, quite a few small business-people are using it to buy low-budget services for their companies.

"We have a lot of small businesses that are building their online presence around Fiverr," says Fiverr CEO and co-founder Micha Kaufman, from his head office just outside Tel Aviv. "They can find people who will design a logo, put up a blog, do a video, people who write up press releases, and do social marketing — and everything I just said is five bucks for service, so you could get all those services and more for less than fifty dollars." 

Kaufman was a lawyer who specialized in patent and technology licensing, but left law to work with an Internet start-up. "I've been clean for 10 years now," he jokes, referring to his law career. He and an old friend came up with the idea for Fiverr together. 

"We noticed that we were doing a lot of things that we were not expert in, things that take a lot of our time, for example setting up a blog.  We're very technical people but even for us, we haven't set up a WordPress blog before," Kaufman explains. "It takes hours to find out hosting place, configure it etc.  Whereas for someone that's a expert in that, who's done it a hundred times, it could take them two minutes." 

Kaufman and his partner realized there wasn't a place for people to meet, in order to hook up for these types of quick-turnaround, inexpensive services.

A happy Fiverr user

In Charlottetown, PEI, Doug Keefe is using services sourced on Fiverr for every step in building his business.  He even tapped the site to generate the actual idea for his business!

"I have an IT background, and I wanted to start a small business online, so I went on Fiverr and asked for some information," says Keefe, who also has a day job as a project manager in IT.  "I heard back from a couple of people, with suggestions of 10 different potential areas within IT that they felt — based on their research — would be profitable markets.  And they provided the research along with the ideas."

He then went to the site again to ask for suggestions for domain names for his business, and to get his website set up.

But what about the old adage, you get what you pay for? Surely a website that cost five bucks to set up can't be too impressive.   

Not so, says Keefe. "So far Fiverr has been a positive experience." 

He's a little more skeptical about his next step. "The reality may set in a little later when it comes to the software development stuff that I'm going to hire out for. That's generally a more expensive task.  But in terms of the research part of the task I was surprised at the quality of what was given to me for five dollars."

An unhappy Fiverr user

Della Doe-Demosse of Edmonton has a less successful experience to share.  She went on Fiverr for services for her new business, Sheamama Naturals, maker of a shea butter cream used for diaper rash. 

"I heard about Fiverr at a business forum I went to," she says. "I was looking for someone to do a logo for me, so I registered and a couple of people offered to design a logo for five dollars."

The designer she 'hired' told her it would take three days, but the deadline came and went with no logo showing up.  "I had to apply to Fiverr for a refund," she says, "which I did get."

As it turns out, Doe-Demosse had heard about another cut-rate website at the same business forum.  She went there and got her logo designed for $40. Eight times more, but still pretty darn reasonable if you ask me. Here's what she got for her money.

A Canadian seller of services on Fiverr

I found myself wondering who on earth wants to sell their services for five bucks?  At first I considered that perhaps Fiverr is similar to Groupon and all the other e-coupon websites that are booming in popularity.  Businesses offer massive discounts (and give half the proceeds to Groupon or whoever) as an exercise in "customer acquisition." 

In other words, it's a loss leader.  New customers come for the bargain, but ideally come back again to pay regular prices because they've discovered a product or service they like. 

But Fiverr is intended to be a straight-up money-maker, not a loss leader, according to co-founder Kaufman. 

"We have tons of people making thousands of dollars per month," he says.  "People are making a living out of Fiverr.  It's still very small but if you can do something that you've very good at and you can do it quickly, you can make a lot of money."

That's the story Jasmine Bowen tells. She's a Toronto-based actress and model who has made 238 sales on Fiverr. 

"My main gigs that sell are the modeling gig either wearing the product or a sign, or the video testimonial or commercial," she says.

When I point out that all those sales add up less than $1000 — Fiverr takes a dollar out of each sale — she admits she wasn't even sure how much of a cut Fiverr takes. But she's not concerned.  "

It gets me out there," she says.  "There's quite a few more hits on my personal website since I started with Fiverr, and my name and my face is out there more."

She says she can knock off about 15 gigs in an hour.  From what she has posted on her YouTube channel it does appear that many of her "gigs" are shot in her own home.

I worry that Fiverr is de-valuing people's professional services.  But then again, given all the challenges entrepreneurs face in setting up a business, perhaps this bargain basement is a place they should visit — while it lasts. 

Kaufman admits Fiverr isn't profitable at this point. "The service is generating a significant amount of revenue per month, but this is going back into growth and acceleration of the business," he says. 

He wants it to become the next eBay of services.  Right now it's the 378th most popular website in the world, according to the Alexa ranking service.  Will it move up, or be gone in six months? 

I bet it moves up — and I'll wager five bucks.

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