Is Fiverr a Good Source of Income for Your Small Business?
When considering income sources for your business, you might be tempted to look at gigging websites like Fiverr, but are they worth it? In this blog, I’m going to talk through some of the pros and cons of selling ‘gigs’ on these websites and whether you can use them as a good source of income for your small business.
What is Fiverr?
If you’re not aware, Fiverr is a website where you can sell services from $5/£5. It started with just this price point on offer (hence the name) but has since expanded, with the ability to now sell your services for hundreds of pounds. These websites make their money by earning commissions on what you sell, with Fiverr it’s 20%.
Examples of ‘gigs’ (the services offered on Fiverr) include blog writing, website design, logo design, VA services, social media management, etc).
Are your services worth £5
Clearly, they are worth much more than that. £5 is less than the national minimum wage at the time of writing this blog. However, many of those offering their services on Fiver are based overseas. £5 for them is worth a lot more than it is for us and so they are happy to accept that rate.
Unfortunately, this makes it incredibly difficult to charge a reasonable amount for what you’re offering when there are plenty of other people consistently undercutting you.
While reputation matters and those popular sellers are able to offer their services for higher prices, it takes time and effort to get those good reviews and high reputations in the first place. If you are starting out on the website, you don’t have the good reviews to set you apart from everyone else, so charging more than the going rate will be difficult.
Can you make a reliable income from Fiverr?
Theoretically, yes, you can. Practically? Probably not.
Let’s say you’re a blog writer and you’re able to charge £10 for your gigs and get consistent work coming in. Let’s also say you need £1000 a month coming into your business to be able to afford their bills (probably a lot more than that!).
How many £10 blogs are needed to earn £1000 (taking into account commission fees)? 125. Can you write 125 blogs per month? If you’re a fast writer and take an hour or less for each blog, you could just about do it in a 37-hour working week but it wouldn’t leave much time for everything else you need to be doing in your business, like marketing, bookkeeping, admin, etc.
And chances are, you wouldn’t get 125 orders through each month, anyway. Not when you’re competing against hundreds of other freelancers offering the same service.
There is perhaps a case to be made for fighting through with Fiverr and putting up with this for a month or two, to get those 5-star reviews and be able to increase your prices. Fair enough but is it really the best use of your time when you could be charging the going rates for a blog of £100 or more through your own business website?
Build your reputation for yourself, not for others
One of the big issues for me with websites like Fiverr is that your reputation is restricted to their platform. You aren’t allowed to solicit your clients for work outside of the platform and the reviews are connected with your username, not your business name.
It’s a sticky situation to be in, needing money to live while also needing to build your business. But short-term profits don’t always lead to long-term gains and I think this is a good example of this.
Networking, making connections, having fewer services sold but at a higher value and turning them into repeat clients, etc are all better uses of your time than trying to sell lots of gigs at a low price and burning yourself out while doing so.
What do you think? Have you made a success out of Fiverr or similar websites and think they are a good source of income for small businesses? I’d love to hear your thoughts.