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Sunday, May 02, 2010

Rip-Off Report: You Will Donate $5 to Fiverr for $5

It all started with my first article, " We Will Rip You Off for $5!".

In it, I explained how "the latest rage", has a payout requirement that is virtually impossible for every merchant to reach. I also wrote 2 more articles after it, and this will be the fourth. In a nutshell, merchants must make a min of 8 sales ($40), in order to be able to withdraw their money. Now, that's bad enough, because that means....


Those who don't make ANY sales won't lose any money to Fiverr but they'll still be TRYING to make 8 sales. So, everyone is trying to make 8 sales while all the ads from the newest merchants (read: no sales yet), will be forcing down the ads by the earlier merchants (read: 0-7 sales).

Keep in mind, if you are fortunate enough to make, for example, $55, and cash out, well, currently, it just starts over again. You have to make ANOTHER 8 sales in order to get paid (if that changes, please notify me in the comments). Along with all those NEW merchants, AND along with all those who cashed out and have to make ANOTHER 8 sales.

So, Here Are Some Comments I Received

1. Fiverr is great, IF you know what you're doing.

I never said a person couldn't make money. And, I never said a person couldn't make a LOT of money. But, when you step back and look at Fiverr from a more comprehensive view, you can easily see that a LOT of people are going to be leaving a LOT of money in Fiverr's wallet. And, though they say merchants can't withdraw until $40, they don't specify a deadline... so, does that EVER become Fiverr's money? And, if so, at what point?

2. People should read the TOS. It is their own fault.

Rubbish. That is the mantra of a ponzi scheme. And, while I'm not saying Fiverr is a ponzi scheme, I AM saying that it is virtually IMPOSSIBLE for everyone who makes 1 sale to make 7 more. Theoretically, maybe... in reality, no way. Even if people had the attention, and foresight, to read a boring, lengthy TOS to find the payout requirements, Fiverr's payout requirements would still be virtually impossible for the whole of the merchant community.

3. It's no different than Google's Adsense program that has a $100 payout minimum.

Au contraire mon frere... (on the contrary), Google Adsense is passive income. Granted there's an initial setup of your website and maybe a little promotion but, otherwise, you can be on the beach in Maui while your website is passively earning income from 1000s of people who don't have to spend a dime to click on your ads.

But, with Fiverr, merchants have to PERFORM a SERVICE... and, in order to get paid by Fiverr, they've got to perform a service EIGHT times. And, that's if they are even FOUND 8 times. After all, there are many new merchants every day and their ad is forcing earlier vendors ads down the line as THEY try to make 8 sales.

So, unlike Adsense merchants who can sit on their behind with unlimited websites being found by millions/billions of people who don't have to spend any money to trigger a PPC ad, Fiverr merchants are in a constant struggle with newcomers for 8 BUYERS, while their ads all age and fall to the bottom of the list.

Conclusion about Fiverr

Whether one thinks Fiverr sucks, or Fiverr rocks, is irrelevant. And, I can't say that the owner(s) of Fiverr intended for their payout requirements to be virtually impossible for all merchants and to result in what, in my opinion, could likely result in an "unjust enrichment" violation of law. But, what I CAN say is that it is unethical to have such payment requirements and, in the very least, they should be IMMEDIATELY visible the moment a merchant initiates a public offering.

As for all those who have gushed and praised Fiverr: In your lemming-like zeal, you have, potentially, sent countless others over the cliff. That's right. While it might not be a lot of money, you have potentially wasted a lot of other peoples' time sending them to such a venture. But, I don't stand in judgment of you. I think it's a pitfall that is part of the learning process. But, do understand, it happened because you think like a consumer... a blogger who gives free advertising for businesses in the wish to become popular... as opposed to a marketer who just happens to also blog.
You are the former, I am the latter.

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