My proposal to reduce meksells polluting the platform

[moikchap]

I'm mainly just pointing out that pursuant to the goal of eliminating an unknown number of unqualified sellers, the "acceptable casualties" are an unknown number of low order sellers, an unknown number of low budget buyers, and an unknown number of low traffic categories. These style of proposal are consistently pitched as being revenue neutral or increasing revenue, but gloss over all that gets cut. The revenue gap these proposals would need to close may be as high as 20% based on the global 'take rate' Fiverr reports in the shareholder letter.

[visualstudios]

4 minutes ago, moikchap said:

an unknown number of low budget buyers,

Not really. There would still be a ton of low cost sellers - the ones that sell a lot. What it would do is remove people who sell one or two $5 gigs per month, and those make absolutely no difference to the bottom line. Their clients would be absorbed by the high volume low cost sellers anyway. It would just concentrate the same amount of buyers on a smaller number of sellers. Which is great for sellers, and makes no difference to buyers. It would only be bad for the sellers that aren't making any money and would drop out, but that's not a big loss anyway - they weren't making any money. Maybe it would remove certain very niche gigs that are only offered by a couple people and only sell one or two gigs per month, but that's negligible.

[newsmike]

7 minutes ago, smashradio said:

If that's what it takes to get something like this off the ground, I'd happily go for it. But I don't really care if the commission goes down or stays the same. The most important part is that we get a big strong doorman named Benjamin to the door. That's really all I care about at this point. 

Agree. I'd be happy to pay the $50/month and the 20%.  Try to get the website we have, the promotion, the external marketing, the worldwide credit card processing, etc for less.  No way. Plus when Benny (I'm on informal terms with him) kicks out the huge amount of folks who do not produce, we all get more visibility, more sales, and much bigger bank. No one has to go, but if their business isn't worth $50 a month as an investment, we need to stop carrying them and their hobby. 

[smashradio]

1 minute ago, moikchap said:

I'm mainly just pointing out that pursuant to the goal of eliminating an unknown number of unqualified sellers, the "acceptable casualties" are an unknown number of low order sellers, an unknown number of low budget buyers, and an unknown number of low traffic categories. These style of proposal are consistently pitched as being revenue neutral or increasing revenue, but gloss over all that gets cut. The revenue gap these proposals would need to close may be as high as 20% based on the global 'take rate' Fiverr reports in the shareholder letter.

I agree, there's a risk. Lots of unknowns. And any such proposal needs to be carefully considered, not just implemented with disregard for what you mention. 

But the idea is sound: charging for entry will ensure a more serious pool of talent. 

The (potential) of increased revenue via monthly fees could make up for the loss, and be what makes the casualties acceptable. 

To turn unknowns into knowns, one have to try, meaning lots and lots of A/B testing: what happens if Fiverr filters out a set percentage of the gigs from search results (perhaps that number could be based on surveys or other data sets), with the results being left having the metrics applicable to sellers who are likely to stay and pay. 

So you could test this, without doing anything permanent. See if the number of sales from such an experiment goes up, or down, and at what point it starts to drop off. 

 

[smashradio]

36 minutes ago, newsmike said:

Agree. I'd be happy to pay the $50/month and the 20%.  Try to get the website we have, the promotion, the external marketing, the worldwide credit card processing, etc for less.  No way. Plus when Benny (I'm on informal terms with him) kicks out the huge amount of folks who do not produce, we all get more visibility, more sales, and much bigger bank. No one has to go, but if their business isn't worth $50 a month as an investment, we need to stop carrying them and their hobby. 

Benny is a good dude!

[moikchap]

 

36 minutes ago, visualstudios said:

but that's negligible

What numbers can I look to and convince myself of that? I keep citing a number and a source that says around a fifth. That doesn't feel negligible to me. I need something to counter that.

35 minutes ago, smashradio said:

To turn unknowns into knowns, one have to try, meaning lots and lots of A/B testing: what happens if Fiverr filters out a set percentage of the gigs from search results (perhaps that number could be based on surveys or other data sets), with the results being left having the metrics applicable to sellers who are likely to stay and pay. 

This seems like a good direction. Start really small scale.

[visualstudios]

24 minutes ago, moikchap said:

I keep citing a number and a source that says around a fifth.

What's that source? I find it very hard to believe that sellers selling a couple of $5 gigs a month represent 20% of the platforms revenue. It just doesn't make sense.

That $5 gigs make 20% of the platform revenue I can believe, but that's a very different claim - because again, a minuscule % of the sellers selling for $5 sell the vast majority of the gigs, while most sell next to nothing. And those that sell next to nothing could be gone with minimal impact.

[moikchap]

The most recent shareholder letter:

https://s23.q4cdn.com/749308338/files/doc_financials/2021/q2/Q2_2021-Fiverr-Shareholder-Letter_FINAL.pdf

It's not directly called out as 20%. I'm trying to reverse engineer it from the 27.8% take rate.

 

[visualstudios]

I just don't see how you can get that from the take rate. Like, imagine there are 100 sellers selling gigs for $5. The overall platform sales are $25.000. One of those $5 sellers sells 1000 gigs. The other 99 sell zero. So, the revenue generated by $5 gigs is $5000,  so $5 sellers would represent 20% of the total sales indeed. But 99 of the 100 sellers could go away and nothing would change. And the one selling 1000 gigs could and would easily pay the $50, so it's a net win for Fiverr. They would make $1050 instead of $1000.

How do you know what % of them are actually selling?

[moikchap]

We're calculating different things then. I'm saying the total is around there, and that based on my behaviour around how I use low-price sellers, I can only provide data from my own usage, which suggests it's spread out. This is why I was saying we need more buyers input. Your observations of buyer behaviour are based on those operating at the top end.

[visualstudios]

5 minutes ago, moikchap said:

I'm saying the total is around there, and that based on my behaviour around how I use low-price sellers

But that's simply not accurate, and you can easily check for yourself. An extremely small number of sellers have an extremely large portion of the reviews, which supports my thesis of concentration of sales in a minority of sellers with the vast majority getting very low numbers (if any).

[moikchap]

Which category should I check to see this in action?

[visualstudios]

Any category, really. Search for logo design, for example, and limit the price to $5. You'll get a couple of pages of people with a lot of reviews, but if you keep going there are thousands upon thousands of people with no reviews, or just a couple. It can be hard to check, because Fiverr doesn't sort them based on the number of reviews, and will mostly hide underperforming gigs, but the ratio is insane. I just checked, and there are only 20 pages of results when searching. At 48 results per page, that's 960 sellers. That's ridiculously low, there are tens of thousands of them, if not hundreds of thousands. Most have no reviews, they just are not showing up on search (a couple show, on rotation). The vast majority of sellers on Fiverr make next to nothing. Truth be told, because the vast majority of sellers have no real skills. At least half of the logo design category is recycled template BS.

[moikchap]

When I search 'landscapes' in the "Illustration" category at the $5 there's a level 2 seller with 73* reviews. a level 1 with 63^ . 12 sellers with between 10 and 25 reviews. 48 with 1-9 reviews. 104 with no reviews.

* They don't offer Commercial Use or Colour at this price. To get that requires going up to the Standard tier at $40.
^ This is a vector artist, which is not entirely fitting for me.

So basically, 2% of sellers account for about a 30% of the reviews, but might not work fro all buyers. About 40% of reviews are mixed between 8% of the sellers. About 20% are mixed between 30% of sellers. 60% of sellers may not have had any action.

 

 

[visualstudios]

1 hour ago, moikchap said:

60% of sellers may not have had any action.

precisely. So, in that category at least, 60% of the sellers could simply go away and Fiverr would lose 0. Pretty in line with what I was claiming.

[moikchap]

Do you feel Fiverr would lose only that 60%? Like, how many from that set do you expect stay?
Or, does Landscape Illustration become one of the categories that gets sacrificed?

[visualstudios]

No, I mean that 60% of the sellers in that category have no sales. Some may make some in the future, but most won't. So let's say 50% of the sellers in "landscape illustration" could just go away and it would make no difference. Other categories will probably have similar numbers. That's what I mean when I say many sellers could just leave and it would make no difference for Fiverr since they don't sell anything.

[moikchap]

The initial proposal makes it sounds like everyone gets charged $50 up front each month, not just those who don't make sales. Is that not the case? If it is, people with less than $50 in sales each month could end up leaving too, which likely would include some portion of the existing sellers with low order counts, and possibly even some of the higher counts if they've been here a long time and don't really get a lot of return customers if they aren't in an 'evergreen' category. Categories which don't lend themselves to repeat business could end up withering away entirely. Or, the orders all filter down to high volume sellers who may not provide the exactly desired product, as described with the two highest sellers mentioned before.

But, I think that was established earlier that this implementation would result in reduced category coverage, but that was considered by the larger sellers to be acceptable in order to protect the efficiency of higher volume categories.

[visualstudios]

36 minutes ago, moikchap said:

If it is, people with less than $50 in sales each month could end up leaving too, which likely would include some portion of the existing sellers with low order counts, and possibly even some of the higher counts if they've been here a long time and don't really get a lot of return customers if they aren't in an 'evergreen' category. Categories which don't lend themselves to repeat business could end up withering away entirely.

Not necessarily, because sellers can have multiple gigs in different niches. You can have a couple of very specific, sell one every year gigs, as long as you have other good selling gigs to compensate. Sellers simply won't be able to have just one gig that sells once in a blue moon and nothing else. They can keep it, but they have to have others that are in demand to carry the profile. Maybe landscape illustration doesn't sell well, but nothing is stoping those sellers to sell other gigs, like book illustrations, for example, to ensure they are way above the $50 a month consistently. After all, they know how to illustrate.

And if all the sellers in a low volume niche that have nothing else for sale disappear, other sellers with successful high volume gigs (not the top ones, since those should already be pretty booked, but the ones in the middle of the pack) will probably look into creating some gigs in that niche just to take advantage of the vacuum and to stand out against the sharks in their main category. The market is pretty efficient.

For example, I had a color correction gig that wasn't performing well. So I just paused that gig. If suddenly there were no other sellers selling color correction, I would probably look into activating it again, since there would be no competition and I would have much more control over pricing. If somebody bought it, great, if not it makes no difference, since I can survive just fine without it.

[moikchap]

Does Fiverr suggest similar gigs to create? I guess maybe Seller Plus does that? They may want to implement a system like that then, and maybe increase the gig cap.

Most of the sellers I use have 1-3 gigs. In my top ten most-used, four only show as having 1 gig. There's a guy with 20 gigs at 12th, who does what I suspect you're suggesting. I don't recall anyone else who stacked gigs up like that. People might not being getting encouraged to.

Like, there's actually four categories of art I look for (landscape, character, monster, equipment), and probably most artists are likely capable of at least two, but they only claim one, so I can only order one. I could compress my spending to fewer artists more easily if they crossed over into my tasks more often. 

[uk1000]

17 hours ago, visualstudios said:

It can be hard to check, because Fiverr doesn't sort them based on the number of reviews, and will mostly hide underperforming gigs, but the ratio is insane. I just checked, and there are only 20 pages of results when searching. At 48 results per page, that's 960 sellers. That's ridiculously low, there are tens of thousands of them, if not hundreds of thousands. Most have no reviews

Fiverr limits all subcategories to showing about 20 pages (I think it used to sometimes show 21). That doesn't mean all those outside the 960 gigs shown there have 0 reviews though.  I'm not sure it can be said that most (or most active gigs) have no reviews because Fiverr doesn't say that (it's possible though). You can view more of them by filtering (eg. if you just view the logo subcategory it will show 960 gigs but if you select the logo subcategory and filter for Modern you'll get 960 of those gigs and if you clear that and filter for Vintage you'll get 960 of those). Maybe Fiverr doesn't want people to keep paging through tens of pages and instead wants them to be more specific in searches/through filtering.

[moikchap]

4 hours ago, uk1000 said:

Maybe Fiverr doesn't want people to keep paging through tens of pages and instead wants them to be more specific in searches/through filtering.

My gut says they want buyers to be overwhelmed so they can upsell white-glove services like Fiverr Business. After I got into VID they started sending me "Let the VID Concierge Find It For You" emails. Between that, and how they claim that the broad spread of niche categories is their competitive advantage, and how their process is funneling, and how they're trying to expand internationally, I'm pretty sure their process is going to be to continue to cast a wide net and then juggle assets once on-board rather than try to trim any. At least, that's the vibe of the shareholder letter; expand, expand, expand. My gut says they also want all the clutter as a way to get people into Seller Plus. Can't sell a way to cut through the noise if there's no noise.