You’re about to sell or buy a gig on Fiverr and are wondering whether Fiverr takes a cut?
I’ve got all the answers for you!
Fiverr takes a cut from the buyer AND the seller. They charge the buyer a service fee, which is $2 for gigs up to $40, or 5% of the order price if the gig is more than $40. From the seller, they take a fee of 20%. If a gig is $50 they take a fee of $2.5 from the buyer and $10 from the seller.
This means that from any gig with an order price of $40 or more Fiverr makes a commission of 25% of the order price.
Some people might think that this is a ridiculously high amount considering the seller provides the service and not Fiverr.
However, you should take into consideration that Fiverr provides buyers and sellers a safe place to trade. This requires a lot of staff, 24-hour support, a ton of servers, a payment system, overheads, and a lot of ads to attract enough buyers.
If you’re a seller and are thinking you pay too much in fees you should think about it this way: As long as buyers find you that wouldn’t find you otherwise and you’re making profit from your gig then it’s a good deal for you.
Other online marketplaces like the stock photography website “Fotolia” take as much as 76% of the seller’s revenue. Selling stock photography is obviously something more passive in contrast to most Fiverr gigs but if you compare the 76% to the 20% seller fee on Fiverr I think Fiverr is more than reasonable with their fee.
Yes, Fiverr does take 20% from every tip. This might seem unfair at first but it’s actually common practice on freelancing platforms. Otherwise, sellers could sell their service worth $100 for $5 and receive the remaining $95 through a tip and avoid paying fees on the $95.
Unfortunately, there’s really no other way for Fiverr to stop people from avoiding fees. If they would remove the 20% fee from tips way too many sellers would send the buyer a custom offer at only a fraction of the real price and ask the buyer to pay the remainder through a tip.
As explained above, Fiverr takes a fixed rate of 20% from the order price. However, if you’re a seller you also have to consider the bank transfer fees.
While Fiverr doesn’t charge any withdrawal fees the withdrawal provider (e.g. PayPal or Payoneer) will usually charge a fee.
If you use Payoneer to transfer your earnings from Fiverr to your bank account you’ll have to pay an additional 3% in fees.
Note: This doesn’t mean that you can just deduct 23% from your gigs price and think this is what will end up in your bank account. If your gig is $100 for example Fiverr will take 20% as a fee, this leaves you with $80. Payoneer will take an additional 3%, this will leave you with $77.6. This means that if you pay 3% to Payoneer you pay 22.4% in total fees on your gigs price.
Fiverr takes a fixed fee of $2 for all orders with an order price of $40 or less. If the order price is more than $40 Fiverr takes a service fee of 5% of the order price.
Fiverr does this to make bigger orders seem more attractive. If a buyer orders a gig for $5 they’ll have to pay a service fee of $2, which is 40% of the order’s price. Meanwhile, an order of $50 will only result in a service fee of $2.5, or 5% of the order price.
The service fee only gets shown to the buyer once he’s on the checkout page. That’s when the buyer will also see taxes added to the gig’s price.
Fiverr makes the majority of its revenue through service and transaction fees. Additionally, they sell subscriptions and online courses.
Fiverr offers sellers an Unlimited Workspace subscription. The subscription costs $24 per month or $216 per year. The Unlimited subscription offers sellers editable contracts, business analytics, priority support, custom-branded documents, and more.
This plan is mainly targeted at businesses that sell through Fiverr. With most other freelance marketplace platforms businesses would be incentivized to leave the platform once they’ve built up their client base.
Fiverr tries to keep them on the platform by allowing them to use Fiverr as sort of a project management tool that is integrated with all their clients already.
Fiverr recently launched its own online course site. Both buyers and sellers can purchase online courses from industry experts. Unfortunately, I wasn’t able to find any official numbers on the revenue share between Fiverr and the hosts of the online courses.
Today Fiverr is valued at approximately $4 billion. In 2020 Fiverr reported an annual revenue of $189.5 million. This resulted in a total loss of $14.8 million in 2020. This shows the costs of an online marketplace really well. Even though, Fiverr makes 25% of every order’s price they still make a loss.