Most people start with lower rates, just like you’d do anywhere else too probably, and eventually raise them to whatever they think acceptable, fair, or worthwhile, once they have some reviews and more experience in this specific marketplace here. In that case, you’ll probably lose some kind of clients and gain a new kind of clients.
Don’t worry about agencies. There are a lot of people who see advantages in using a platform like Fiverr, after all, there are a whole lot of gigs sold daily here, don’t forget that, and not all of them are $5 gigs.
Some people prefer to work with agencies, some prefer to directly work with the translator himself or herself.
Or like the ease of using Fiverr, or the relative anonymity, the option to directly order a gig when they need something small but really quick, etc.
Many people don’t “only” buy translation too and are happy to be able to get everything they need “under one roof”.
Many people know that some agencies use Fiverr, too, so if you won’t know either way if the translation you receive from the agency was translated by a Fiverr seller, you might rather work directly with the Fiverr seller, no? Typically, Fiverr rates will still be cheaper, an agency has costs as well, they don’t just need to pay the translators they work with but they also have overhead costs, management personnel, perhaps a not-digital office, higher accounting costs, etc.
It’s not an employment. Treat it as an experiment. Try different things and price points and see what works for you. If you’re worried raising the cost too much, try to find the price you can live at and still get orders.
You might not get as many orders than if you’re very cheap but you might spend less time on those fewer orders for the same money and can use the remaining time for work elsewhere, or your own projects, whatever.
One of the big advantages is that you have no upfront costs for Fiverr, apart from your time.
What’s the worst that can happen? Nothing happens to you, even if you lose clients. And you can always lower prices again if you won’t get any orders at all. So, either start with lower prices and see it as an investment if you don’t earn so much the first time, or start with what you think are fair prices, and see where it will take you.
And in case you find out that it doesn’t work for you, you’ll only have lost a bit of time and gained some experience and know that it’s not for you and that you can focus on something else, you’ll not have to wonder “what if”.
Bottom line, don’t worry so much, just do, try out ideas, and find what works for you.