Like most folks in the personal finance world, I make a point of being careful with my money. But over the years I’ve also learned the bottom of the barrel price isn’t always the best deal. For example, if I got estimates from several companies to replace my flooring or paint my house, I wouldn’t go with the lowest bid – I’ve learned in my nearly five decades that most of the time the cheapest option is not your wisest choice.
Something else that has impacted my decision making process has been the fact that my husband and I are entrepreneurs. When you are in business for yourself, you see things from the other side of the fence. At least that happened for me. In particular what I’m talking about is the process of hiring a local business or acquaintance, rather than to find the rock bottom most penny pinching deal.
I’ve been hearing about this site called Fiverr lately where you can buy many services for just five bucks. I’m all for pinching my pennies, but from the first time I heard about Fiverr I’ve felt uncomfortable.
You Get What You Pay For
My first thought was quality. Would you feel comfortable hiring someone to proofread your 200 page book when the description says, “I will proofread you entire book for $5”? If you didn’t see the glaring error in that sentence then maybe you will be happy hiring this person. Or maybe you want a website built, you can get a 5 page website built for five bucks. Really? I used to build websites and if everything is in place sure it might be possible to build a site in an hour. Or maybe if I’m really lucky half an hour? But what kind of quality do you get for five bucks?
I don’t know anyone who agrees with slave labor, whether in the past or present. But doesn’t it feel like you’re paying slave wages to pay only $5, when you know that other people charge much more?
Or do you think the person charging more is just ripping people off? Should everyone perform services dirt cheap?
People doing “gigs” for Fiverr pay 20% off the top to Fiverr – that’s $1. If you’re a law abiding citizen you’ll be setting aside 30% of your earnings for Uncle Sam, and possibly more for the state and/or city in which you live.
So a person working on Fiverr in actuality earns about $2.80 for that gig.
That’s horrible. I don’t think I could bring myself to hire someone at that rate. It just seems wrong.
Undercutting Everyone Else
Or maybe you’re saying, more power to that person earning $2.80 net. It’s their choice to provide services cheaply. That’s right, it is their choice. Maybe they’ve found a way to perform the task electronically and they can process ten tasks simultaneously. But many of the services I’ve seen offered at Fiverr take longer than five minutes, and to my knowledge cannot be automated. Maybe they are hiring people who live in third world countries to do the work where the value of the dollar is much lower.
You know… there’s a point when you change from being a penny pincher into a complete miser.
Supporting Small and/or Local Business
If you had the chance to hire a friend in your networking group or someone on Fiverr, what would you do?
Let me share what happened to me.
I’m involved in a small networking group. I provide a service for which I charge $15. This is a reasonable amount, in fact “professionals” in the field charge about double. Our group members are aware that I provide this service and one of our members has been in touch with me twice stating she would be ordering from me.
A few days ago she went to Fiverr and purchased this exact service and reported back to our group. Several members asked her for the name of the person she hired at Fiverr. I have no idea how to respond to this situation. I have a very hard time believing my friend did this. All I can say is it has placed me in a very awkward and uncomfortable position. What would you do?
Have you used Fiverr?