Reading through the transcript of the earnings call on SeekingAlpha, Fiverr really emphasized building up their Fiverr Business accounts, which can sit on top of their existing offering base.
Sleuthing through Fiverr’s FAQ section, these business accounts allow for the management of multiple contractors that can be aligned to complete a larger project and includes project management tools within the module. Importantly, the business accounts also come with an annual subscription fee.
Referring back to the Q&A section of the quarterly update call, Fiverr also sees the growth of recurring contractor payment models being developed in the future within the Fiverr Business account structure.
One question for the longs - does the take rate give you pause?
27% is very high in IMHO, and I wonder if that is sustainable.
I hire graphic designers from time to time and would immediately move to cut any middle man out of the transaction after a first job well done if I had to pay those kind of rates.
Then again, FVRR seems to be executing very well so who I am to opine.
My anecdotal experience for take rate as a third-party IT contractor, is that my head hunter’s rate was close to 100%. This was through a “brick and mortar” type firm that had to cover high cost of acquisition. This resulted with my current employer cutting out the middle man and offering me a full time position.
This obviously doesn’t translate 100% to Fiverr’s model, but is at least indicative that their model is probably priced accordingly to their offerings.
My anecdotal experience for take rate as a third-party IT
contractor, is that my head hunter’s rate was close to 100%.
Good morning, Donquijote1022.
Most of that is pure greed, a whatever-the-market-will-bear mentality.
Most of those brick-and-mortar contract service agencies or “temp agencies” will make the contractor and the client sign contracts that forbids you from disclosing your rate and forbids the client from disclosing what they are paying. I wonder why they do that! Could it be that they don’t want their greed exposed to the world for all to see?
As a consulting software engineer I’ve worked with contract service agencies since 1970 (in those days they were informally called “job shops” and we contractors were called “shoppers”). Back then the agencies got 35 percent markups and were happy to get it.
No doubt Fiverr analyzed all of this in the most minute detail when they set their take rate. 27% will be seen as a bargain.