The 3 main reasons I’m ashamed that Fiverr is Israeli

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Yes, that’s right.  I’m Israeli.  I’m proud to be Israeli.  And I’m so in love with this country, and with Israeli innovation.

But there’s one Israeli company that I believe is giving us all a bad name: Fiverr. 

Why?  Well, the answer isn’t really all that complicated .  I'm ashamed to share this country with the bad business practices of a company like Fiverr because in a lot of ways they act like the big bad bully of the online marketplace world.

What does it take to become a great big ruthless corporate bully?  I could probably name lots of ways, but let’s stick with the first 3 reasons that come to mind:

  1. Out of control service charges
  2. Punishing responsible sellers
  3. Creating refund / recourse policies that are bizarrely cruel and draconian

Some of this is probably stuff you already know.  But the reality, when you put it all together, is far more grim than you could imagine.  What it works out to essentially is digital sharecropping, a term others have used better and more articulately, but a metaphor which I’m going to borrow for now because it works.

How can we tell that’s what’s going on here?  Well, this is a decent working definition of sharecropping:

Sharecropping or feudalism is a form of agriculture in which a landowner allows a tenant to use the land in return for a share of the crops produced on their portion of land.

In our Fiverr metaphor, Fiverr owns the “land,” which is the high-profile real estate of a high-ranking web address.  Benevolently, they let sellers like me use the land to grow crops, in this case, megabucks, in return for a share of the crops, i.e., some of the megabucks for themselves.

And if we’ve learned nothing else from Reconstruction in the southern United States, we know deep down in our heart of hearts that sharecroppers can never be owners.  The only person who gets rich this way is the person who was already rich to begin with – the landowner.

If you don’t believe me about this cycle of sharecropper poverty and how it applies to Fiverr, feel free to skip everything in between and scroll down to the bottom for a your FREE handy-dandy reference guide.  I created it for you – you don’t have to thank me.

I want to be very clear.  This is just my opinion, based on my experiences.  I’ve had good experiences on this site, but then again, most – especially recently – have been pretty bad.  If you’ve had great experiences, I’d love to hear about them, and maybe even write about them.

I also want to add that when I first became aware of Fiverr, I was the BIGGEST fan.  Prove it, you say?

  1. This post about my early experiences freelancing on Fiverr
  2. This awesome rave about using Fiverr to find children’s-book illustrators
  3. This awesome rave in defense of my first post where I quote an actual Fiverr artist about why Fiverr is great.
  4. And more…

But the way I see it, things have taken a turn for the worse lately.  And it’s making me really sad to watch what had the potential to be such a great platform heading straight downhill from a freelancer-experience perspective.

So what’s my beef with Fiverr these days?  Well, to begin with…

1) Fiverr’s service charges are out of control

More than once I've had buyers pull out at the last minute because they didn't realize all the service charges Fiverr piles up on top of the base $5 rate.  If they're buying from within Israel, there's also VAT, even though I as a small business don't charge VAT.  And these charges generally pile up -- the more the gig costs, the more they're going to pay on top of the advertised rate.

The other day, though, I saw a post which drove home how nuts the system is.  As a seller, I only make $4 for every $5 gig (very few of my sales only cost $5, but it scales -- I get 80%, they get 20%).  And if I want to buy a gig, I pay all the regular service charges.  So basically, buying a $5 gig costs me (as an Israeli) $8, exactly what I would make from selling two $5 gigs.  That's nuts.

They claim all the charges are to ensure that you have a great experience on their site.  Frankly, I've had better experiences on Craigslist when it was purely text-based.  In fact, in some ways, Fiverr would work way better if it was purely text based.  There are few bells and whistles here that are absolutely necessary for doing business.  I say call a spade a spade – a service charge is just that, a charge that lets them profit from both ends of the transaction, grabbing a little bit from both seller and buyer.  And not really caring much if it discourages sales because they have other ways of making money (including, now, Fiver Courses and Fiverr Pro see below).

Basically, the only party getting rich here is Fiverr. But then, you knew that already, right?

According to this financial news site, the company is planning a $1 billion IPO sometime in 2019 and they’re courting Wall Street Investors.  And they’ve backtracked a little from a 2017 ad campaign entitled “In Doers we Trust” praising sellers essentially for giving up their lives and working like slaves or sharecroppers.  But basically, there are no surprises here.  They’re looking for a way of getting richer, selling a platform that is built on the backs of groaning, exhausted sellers all over the world.

You can bet if they find out it’s an Israeli company, they’ll also be thinking some pretty horrible things about the “startup nation” and its manipulative and self-serving business practices.  I know I am.  I know I’m thinking how awful it is that this is what some people might think of when they think about Israel.

Hey, everybody!  We have some great companies here, I promise!  Just happens that Fiverr isn’t one of them.

Here are a few awesome Israeli companies.  I promise most of us are incredible here.  Look – so many good apples.  Too bad one stinky one is ruining it for so many people…

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And then… along comes one bad apple.

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Yuck.  Sorry, world!

2) Fiverr systematically punishes responsible sellers

How do they punish sellers?

There are so many examples.  But probably the most vivid is the cancellation policy.  In order to protect their precious income stream, they punish sellers for cancellations. 

Any cancellations.

Even if it’s not their fault.

For example.  Let’s say a buyer is looking at my gig page.  Her finger slips and she accidentally places an order.  Whoopsie!

Not a problem… she contacts me with a cancellation request, I quickly agree, because as a freelancer, it doesn’t make any sense for me to refuse.

And then – Fiverr has a hissy fit. What form does this hissy fit take?

It’s called Fiverr Seller Levels.  Theoretically, it’s a meritocracy:  if you’re a good seller, respond promptly to inquiries and hand in all your work on time, you’ll go up a level or two and get a special badge on your account.

Which is all lovely… Except one of the metrics by which they rank you as a good seller is “order completion.” That sounds fine, right?  Who’d want a seller who didn’t complete their orders?

Ah, but remember that stupid buyer who accidentally placed an order?  That counts. 

It also counts if someone places a big order for something I don’t do.  Let’s say they want me to transcribe the text of their YouTube video and translate it into English.  I don’t do transcription.  But they don’t bother contacting me ahead of time.  They glance at my gig page, see that it says “translate” and assume that covers everything they need.  So they place an order.

Let’s say they place a big order (even though my page says – in two languages – “for goodness’ sake, whatever you do, don’t place a big order without checking in with me ahead of time!!!”).  A VERY big order.  They have a lot of transcription, they guess at the cost, and add the charge for 24 hour delivery.

Awesome.  But I can’t do any of it and they’re too stupid to realize that.

The natural thing, the SANE thing to do would be to cancel.  I can’t do what they’ve ordered.  I never said I could do what they asked, and it was their own stupid fault for ordering without even talking to me first.

But Fiverr doesn’t care about that.  Oh, sure, they’ll let me go ahead and cancel.  But then that BIG cancellation (remember, it was a BIG order!) immediately affects my order completion rate.  It doesn’t matter if you finish 100 little jobs; that 1 BIG job you didn’t do is going to bring you down, down, DOWN.

When your rating falls, you don’t come up as high in the search ratings, though of course, the criteria they use to rank search results on their site are probably top secret.  You don’t look as good to potential buyers.  You don’t get as much work.

And all because you refused to do work you… couldn’t do?

You bad seller, you.

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Their system has no way of differentiating between stupid cancellations and actual situations of seller failure, meaning they’re inevitably going to end up punishing good sellers… because customers are stupid and don’t read the instructions.  And because it only takes one to destroy a reputation built up, in some cases, over years.

But alas, this is by no means the only way Fiverr punishes sellers. 

In fact, as of a couple of weeks ago, they have just introduced two BRAND-NEW ways to punish responsible long-term sellers:  (1) Fiverr courses and (2) Fiverr pro.

Fiverr Courses are just what it sounds like. 

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If you're a graphic artist, say, you pay them to take a course and then they give you a special badge that shows up on your seller page.  Presumably, buyers are going to know what that is and choose sellers who have the badge over sellers who don't.  And in the meantime, Fiverr is going to rake in a ton of money from sellers to "teach" them skills they already have (because who in their right mind would start a Photoshop gig on Fiverr if they don't know Photoshop???).

This system honestly reminds me of a sharecropping system where they'll happily take money out of your income to sell you the tools you need to make money.  Disgusting.

Oh, and then there's Fiverr Pro, a new way "to help highly skilled sellers standout from the crowd" (could have used a pro copy edit on that one) and help buyers looking for "highly skilled professionals." 

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(look, it’s even got its own search box, so you don’t need to turn up search results that include regular ol’ sellers like me!) Sad smile

In other words, a site that started out being a place where little-guy sellers like me could share their skills in a highly competitive but still somewhat meritocratic environment, is slowly shifting to a model where big guys can edge them out of business.

(Why create a new tier for pro sellers?  Simple math:  if they rake in 20% of every transaction, then bigger transactions give them a heftier pie slice.  And believe me, nobody loves pie like Fiverr.)

I'm a good seller and have been for a long time.  I have a ton of positive reviews, and I do great work.  I was a Level 2 seller forever and ever until they bumped me last month due to a single cancellation that wasn't my fault (see above).

But when I applied to become a pro, they pretty quickly bounced me back an email saying I wasn't what they were looking for: "your application does not meet the current requirements" -- not that they'll tell you what those are.  I think it mostly comes down to external verifiability.  In other words, you already have to be big and good, and Fiverr reputation doesn't count.  Why doesn't it count?  It seems that in refusing to acknowledge success on their site, they're basically acknowledging that their site is worthless.  Which seems odd to me, but then again, as I've said above, they're all about the ruthless moneymaking and not much else.

And as one last piece of evidence that that is true, I offer you...


3) Fiverr’s refund / recourse policies are cruel and draconian

Ah… yes.  Refunds.  Recourse.  This is what I'm up against this week. 

This is why I started writing this post in the first place.

Because I feel like I’ve been robbed.  Kinda like this, only more so.

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(image © L. Joo via Wikimedia)

I occasionally buy gigs on Fiverr, and last week, I placed a quick order with a seller I'd used before.  I had some money in my account but not quite enough so the rest came out of my PayPal account.  The seller then replied saying she was having some medical issues and had forgotten to shut down her gig.  No problem, right?  I hit Cancel, she agreed, and the order was cancelled.  Based on an email that the money had been refunded to my account, I assumed (mistake) that the money had been refunded to my account.

I quickly found another seller and placed another order for the exact same amount.  Easy, right?

And here's some basic math -- my account balance was now... did you guess ZERO?
Well, no.  It was -$3.00.  And my PayPal had also had the exact same amount taken out again.

What the heck, Fiverr?

A quick email to Customer Support restored my balance to zero.  But then they told me they couldn't refund the money to my PayPal, meaning I was still out.  A small amount, sure, but why should I have to pay any amount twice to order the same work?

After a week of back and forth, where they were "sorry [I] felt that way" and that my "experience was less than positive" I was sick of their nonsense and filed a dispute with PayPal.  That's when I got a notice -- any claims through a payment provider are a violation of Fiverr's terms of service.  And if I don't cancel my claim, they can remove my account.

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Yup, that's right.  If their customer support staff don't give you the answer you like, you have ABSOLUTELY NO RECOURSE TO ANY THIRD PARTY:

I checked the terms of service, and they’re absolutely right.  You basically agree when you sign up that you are letting them do whatever they want with your money.  If you don't like it, go somewhere else.  Here’s the exact wording from their Terms of Service:

Filing a transaction dispute or reversing a payment through your payment provider or your bank is a violation to these Terms of Service. Doing so may get your account temporarily or permanently disabled.

Do you remember agreeing to this?  I sure don’t.  You basically agree when you sign up that you are letting them do whatever they want with your money.  If you don't like it, go somewhere else.

If you have made it this far through this post, good for you – as a special reward, I’ve created this delightful infographic.  Just to review, here’s your quick and easy FREE reference guide to the cycle of Fiverr sharecropper poverty:

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Oh, and if you’re buying on Fiverr… here’s a helpful visual.  In case you’re picturing your freelancer just sitting, h anging around the house, waiting for you to place your order… maybe a little something like this:

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You should probably visualize something a little more like this:

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(Photo © Missouri State Archives via Flickr)

But picture the workers a little more beaten-down.  A little more frazzled.  A little more nickel-and-dimed by every single niggling policy.  Knowing they have nowhere to turn.  Knowing they can’t make it on their own in the harsh reality of the global marketplace.  Fiverr has got them right where it wants them.

Maybe just picture something like this instead:

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Do you have a Fiverr horror story?  Feel free to get in touch using the contact form at the top right.