Aside from the fact that they take one/fifth of what you make, they hold it to earn interest for them in a bank account I am sure. Imagine how much they are making every month on an interest account bearing 5% for example. They say they hold it for other reasons, but I am sure it is because they are earning interest on it. Other wise they would lower the days they hold the money as you go up in level.
Pretty sure that is NOT the primary reason.
It has to do with legalities and other reasons such as If a dispute is raised by the buyer post delivery, while the money is in escrow and not paid to the seller, it is easier to resolve the dispute if the money needs to be returned to the buyer and etc.
I´d bet the bank guy put 5% in the contract just for fun. ; )
The days for mere mortals are 14, the days for TRSs 7.
There are no legalities with other services, apparently only with fiverr. They don’t lower the date as you go up in level.
Doing some rough mental arithmetic, I have calculated that Fiverr MAY have earned $20 in interest from my entire earnings since becoming a seller, 15/16 months ago, based on 5% which would be quite high considering that it is very short term. It is more likely to be less than that.
The reason they give for holding it is much more plausible than securing such a paltry amount.
You are not multiplying that by 200,000 transactions they might be holding money for at any one time. Sure your money leaves in 14 days but it’s replaced by someone elses.
Assume my earnings are the average. They would be making $20/ seller every 15/16 months. I am not going to state percentages as that would reveal my income but suffice to say that it is not worth considering. Consider that the interest is only for 14 days, so is a fraction of the 5%.
If Fiverr need the money that badly then we should all be worried.
200,000 transactions is on the low end of the spectrum.
Number of transactions is irrelevant. My $20 calculation is the total. You could multiply the $20 by the number of sellers but frankly I think that would be a gross exaggeration as I suspect the vast majority of sellers registered actually earn less than a couple of hundred per year. I earn a livable wage from Fiverr.
If the number of transactions is irrelevant, they your replies are off topic. This topic is about how much interest fiverr must be earning off of us as a whole, not just you. We aren’t just concentrating on you. We are trying to estimate their income on using our funds for 14 days. Please don’t turn this into a personal deal, it’s not.
it’s ok with me if they earn interest on it. It’s still the best way for freelancers to get business.
- “Successful people never worry about what others are doing.”
- “Successful people build each other up. They motivate, inspire and push each other. Unsuccessful people just hate, blame and complain”
- “People who can’t stand to see the success of others will never experience their own.”
@hospemex I am not sure who “we” is. I don’t have any concerns about how much interest Fiverr earns. It’s a business and all of us who sell here can choose to stay or go. If you found another site that has faster clearance time for you and your earnings are strong there, that’s great! Your opening question has been guessed at (which is all anyone on the forum can do) so I’m not sure why you are getting aggravated. You could always contact Fiverr Customer Support and ask them directly if they would like to reveal their financials. I doubt they will do so, but all you will find on the forum is random estimates.
If by we you mean you and people you work with directly, you could do some of your own guesswork by taking an average interest rate and doing the math based on how much of your earnings tends to sit in pending clearance for 14 days. I don’t know if you’d choose an average interest rate from Israel or somewhere else, but have at it.
Wow now we got two moderators on this topic. It makes asking a question more of a big deal than it really is. Why does asking about the potential earnings in interest for the money they are holding warrant two moderators? Holy Smokes. Does that mean it’s a bid deal because… they just don’t like people asking questions?..or they aren’t declaring that on their income statements, to evade taxes?.. I really don’t know. But having two moderators on this topic just makes my mind race with possibilities.
Tada…now you have 3 moderators
FYI moderators are just volunteers and regular sellers. We are not staff.
Mods are sellers like you and me. They can read and write on any post like you and me.
How does the number of transactions affect things?
The reason I personalize the calculations is because I know what I earn but ok, lets try speculation instead:
Fiverr sells a gig every 6 seconds.
14 days = approx 200,000 gigs sold.
Lets say they are all at $5 for convenience sake.
This is $1 million every 14 days. As you mention, the money is constantly coming in and going out. This means that there can be a consistent $1 million in the account at any time during the year.
Now, lets calculate the interest based on a 5% rate (I’m not up for mental compound interest, feel free to do so)
Approx $50,000 per year in interest.
Hardly massive for a company who raised $60 million in funding a couple of months ago.
Edit: I should add that I am a forum moderator meaning I moderate on the forum as a volunteer along with a team of other volunteers. I have no inside information and the gig every 6 seconds is based on the claim by Fiverr’s CEO in 2015. I have no way to verify it.
I find the use of ‘we’ the one mod raised an interesting point too actually, seen that in your OP you wrote ‘of what you make’, not ‘of what we make’. What about your level point actually? After my reply that there is lower days for higher level you still wrote that they don´t lower the date as you go up in level. I hope you didn´t not reply to that just because I´m no moderator.
But looking at the other moderator’s equation now to see if I can sleep well after that and then off, a good night to all, moderators or not.
Let say for they are hold an average of $20 per user with transactions pending, by 200,000( on the low end) that is $4,000,000 dollars, 5% of that each month is $200,000. I gather that most decent sellers have about $50 dollars or more being held at one time, by 200,000 transactions, that is a hefty number.
But do they, do so progressively? I understand that you have to get to some superstar TRS status to get down to 7 days. That does not sound like less on level 2, then less on level 3, etc.etc.etc. It sounds like they are saying, “if you are making us a boat load of cash we will lower you down to 7 days.”