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How Fiverr Works: Business Model and Revenue Stream

By Tanvir Singh 7th September 2020

Fiverr is an online talent solution company that facilitates the connection between the leading pool of freelance professionals and customers all around the globe.

Fiverr’s Launch and Current Valuation

Fiverr was launched in 2010 to provide a hybrid connecting platform for Freelancers and companies. Today Fiverr is valued at $3.1 billion and is often considered as the biggest aggregator of freelancing talent. This article will explore how Fiverr works and exciting insights into the business model.

Fiverr Business Model

In Business terms, Fiverr could be easily understood as a typical two-sided network, one side of the network we have Freelancer, looking for work in their domain. And on the other side of the network, we have Companies or individuals who want to get their job done. In other words, Fiverr can also be considered as a marketplace for Freelancing work.

Fiverr Target Segment

Since Fiverr can be classified as an aggregator of freelancing talent and Companies, they leverage from a huge Target Group. On a broad manner, we can distribute the Fiverr customer segment into two buckets:

1. Freelance Professionals

Since Fiverr markets itself to companies as the best freelancing talent marketplace, it monitors the quality of Freelancer through a series of skill tests and background verifications.

Depending on the skill level and experience in the field, specific profiles are highlighted to the clients.

Breaking it down even finer, an ideal Target Segment Freelancer will have


·        Age: 15-70

·        Gender – All

·        Income – Any

Geography – Any

Interest – Any

In Short, there is no limitation on Target Segment for Fiverr in Freelance Professional.

2. Companies

Companies are required to sign up and post the job requirements; Fiverr Analyses the requirements, shortlist top-rated candidates and match it to the job on hand. After that, clients receive proposals from freelancers and can schedule calls and sign contracts for the best fit.

Fiverr promises a digitally secure tool to share information with freelancers, which is only kept between the company and Freelancer.

Revenue Model

A service offered on Fiverr is called a Gig. The service Seller sets the initial price for a Gig.  After payment is made, Fiverr charges 20% of the fees as commission.

For example, If a buyer purchases a video design service for $100 for a seller, then the seller will receive $80, and Fiverr receives $20.

Fiverr takes care of the payment process through its platform by enabling almost every possible payment gateway.

Before purchase, all buyers can see the service rating for sellers and know what to expect.

The Way Forward

At the present moment, the freelancing community is more in demand than ever before. With lockdown restrictions across the globe, there is an ever-increasing demand for bridging the gap between companies and professionals located at their remote places.

In such a scenario, talent aggregators play a massive role in helping businesses move forward.

Want to create your freelance platform like Fiverr? You can do it in a matter of hours now, with Husky.

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