Losing $20k+ on Fiverr and My Plan on Automating It

In the end of March, I started to experience a significant change in my Fiverr journey—and it wasn’t the first time. You know that feeling when something major happens and you know things won't go well in the coming weeks? We often tend to overreact in situations like this.

My earnings this year have been consistent, but my service is dependent on Instagram's action limits. Every time Instagram releases a new feature, it automatically creates an opportunity to build a growth service around it :D. Over the last two years, it has been very popular to use a strategy where you like hundreds of Instagram stories from other people per day, allowing clients to gain between 10 and 40+ followers daily along with a lot of engagement. However, I knew that this strategy would eventually be patched by Instagram, and this indeed happened at the end of March.

That's how I lost $20k or more within a month—I had to stop accepting new clients and refund some orders.

My biggest lesson from this situation, once again, is to try to differentiate your services on Fiverr or anywhere else. In my case, Instagram growth is not my only source of income; I also receive a good number of orders for content creation and management, which makes this decline not as scary as it seems.

Don’t get stuck in operations! Outsource early!

I was in both boats. Boat #1 is when you want to do everything yourself. You reply to messages, set up orders, update clients, deliver orders, and cash out as much as you can with minimum expenses.

Boat #2 involves delegating your work to your team. In case you haven’t seen the video I recorded recently about automating your Fiverr, consider this: looking at it long-term, you probably won’t be able to do everything yourself all the time. You will easily become exhausted and demotivated. But when you hire, you need to realize two important things:

1. Case #1: Hiring someone with an ROI in return. For instance, we pay our content designer a salary of $800 - $1200+ per month. We know exactly how much this person will bring us in revenue based on the workload.

2. Case #2: You hire someone who will not necessarily bring you $$$ in return, but this person will offload your work and free up your hours. It’s more of a management role.

In Case #1, it’s more predictable because you can see how much revenue the person will generate, and if that person wants to earn more, you can charge your clients more, leading to a healthier collaboration.

But in Case #2, it's harder to calculate the salary because technically the person will do the same job all the time, yet the salary will have to be increased. So, you are increasing the salary, but the workload remains the same.

Whatever hire you decide to make first, I would still highly suggest starting this process as soon as you can. I have hired and also fired a lot of people, and here are some important things I learnt:

• Have a clear workload that you can dedicate to your team member. They don’t know your business. What might sound simple to you could seem very complicated to them. Break your workload into several blocks and try to outsource it block by block.

• Don’t build friendships with the people you hire. It’s going to hurt you in the long term. You might be lucky and get someone who is disciplined, but often they can take advantage of the friendship you are trying to build. Of course, they want to be friends with you because their career depends on this job. The more neutral and distant you can keep the relationship, the more sustainable it will be.

• Fire sooner rather than later. Most of my firings happen within the first 1-2 weeks because we can clearly see how the person works and whether they are a good fit. The longer you keep someone and give them 'second chances,' the more painful it will be to say goodbye.

• Don’t hire entrepreneurs. When you hire someone who also wants to pursue their own ventures, it won’t be sustainable. They may perform well for you in the short term, but in the long term, they will always want to do their own thing and won’t be able to dedicate 100% of their time, focus, and energy to your work.

What is my action plan now?

I have accepted my situation and I am currently actively working to build better processes with my team. This includes fully offloading inbox and order messages management, and improving our response time. Also, for my Instagram growth service, I do have backup operations, but of course, it’s slightly less exciting than the previous method. However, what I've learned is that clients ultimately want to see results and growth, and I can still deliver that under the current circumstances.

I enjoy operations and will likely spend more time improving my service and building internal processes. I considered dedicating my time to scaling activities outside of Fiverr, but now, looking at my Fiverr business, I realize there is still much to do. This is probably why you are reading this newsletter—you want to start or scale your own journey on the platform as well.

If you already have an existing agency, then Fiverr can still be a good option for you. There are millions of buyers every month, and if you rank high in the search results, you could receive at least 10 new orders daily. This could significantly boost your agency, and at the same time, you can fully automate it with your existing team or build a team specifically for Fiverr.

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If you have any questions, feel free to reply to this email, and I will do my best to get back to you. Thank you so much for your time and support!

See you next week!

Kind regards,
Vasily