Changes to Client Pricing Structure: Questions & Feedback

[MichaelJ]

Over the next several months, we will be changing our pricing structure for clients. Our goal is to simplify pricing by removing subscription tiers (with the exception of our Enterprise offerings) and moving towards an easy-to-understand fixed percentage model. 

Check out the announcement and let us know your thoughts about these updates in the comments below.

[7857af33]

This is really great news.

[petra_r]

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Lucas S wrote:

This is really great news.

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How?

[2f90f46c]

I agree. This is a horrible deal for clients. I don't use those features but I now have to pay 2% more.

Upwork is pulling a Netflix play and will regret it.

[plobe]

Do I understand correctly (as a client) that the payment fee will go from 3% to 5%?

[MichaelJ]

Hi Yedidel,

Thanks for the question. In general, for each transaction, clients will pay a flat 5% fee. We also offer a discounted fee of 3% for eligible clients in the U.S. who pay using their checking account (ACH).

The reason we did not provide specifics in our announcement is that a small percentage of clients will continue to see the old Plus plan experience, with a $49 monthly fee and 3% processing fee, or will have access to the Basic plan, which has a flat 3% processing fee for all transactions but excludes many features. Clients who will see a change to their current fees will receive an email or will be notified on the platform detailing how their fees will change. 

[a_lipsey]

Mike, just to clarify, a fee based on percentage is by definition not "flat". 

[MichaelJ]

Hi Amanda,

This fee is a flat percentage as opposed to the tiered percentages of the freelancer service fee. 

[a_lipsey]

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Mike J wrote:

Hi Amanda,

This fee is a flat percentage as opposed to the tiered percentages of the freelancer service fee. 

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A flat rate is actually flat, meaning it doesn't change. The confusion you're getting is because the terminology doesn't work. You could say a "fixed" percentage or a static percentage, but referring to a percentage as flat is confusing (as you can see by the comments) because charging something on a percentage means that the rate is not, in fact, flat. 

For example, a major shipping outlet has flat-rate packages. This means that no matter where you ship, if it fits in the box, the rate is $10.99. The rate is "flat". A rate that changes, based on a percentage, would not be flat. You would be better of saying the percentage remains the same regardless of contract size rather than trying to make words mean something they don't. 

[MichaelJ]

Hi Amanda,

We updated it to "fixed percentage". 

[pdestefanis]

A "flat percentage"... My God. 

[fcda3ae5]

How I read sounds like you are charging me an extra 2% to pay you the way I have been paying you--via credit card.  However, if I want a "cash price" using an ACH, your fee is discounted to 3%. That I believe is the problem.  As a credit card merchant, I am not allowed to have two fees structures, meaning my price is my price.  I will need to reach out to my credit card company because if the rules have changed I will be adding "cash" prices to my fees too.  This dates back to the '70s during the gas shortage.  I'm not sure if it's some credit card rule or if the U.S. laws were changed to prevent that but I will check. I am NOT interested in paying a fee in order to pay my bill.  Charge what you must charge for "costs" and leave it at that.  Otherwise, how long will it be until we see the rent fee, water fee, telephone fee, and marketing fee, over and above our invoice? 

[pdestefanis]

The reason you did not provide specifics is because you chose to be sneaky, and just drop this on client unannounced. 

As a client I loathe this change, and would like to be in the group that keeps paying for the "Plus", with a 3% fee. Funny enough, that "Plus" used to be free before.
Mike: be honest. UpWork: be honest.

[pdestefanis]

Exactly. A 66% increase.

When they tell you "pay with ACH", ask how much it used to be before for ACH payments.

[m_terrazas]

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Mike J wrote:

Over the next several months, we will be changing our pricing structure for clients. Our goal is to simplify pricing by removing subscription tiers (with the exception of our Enterprise offerings) and moving towards an easy-to-understand flat-fee model. 

Check out the announcement and let us know your thoughts about these updates in the comments below.

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Wow, I don't know if I understand this very well, but are you saying that you are going to charge customers more?
And by the way, also if I understand correctly, the profits are once again focused on the US?
I don't think customers will be very happy that it increases costs by two points.

On the other hand, wouldn't it be nice if you advertised in "Clients" so we can know what they think?

Seeing the ad I went through "Clients" to see if there was any reaction, but it's not there, where I think it should be.

[MichaelJ]

Hi Maria,

We are changing the pricing structure. Our goal is to have one fee instead of different client subscription plans. This will simplify clients’ experience and give more people the chance to access important features. For example, clients will now be able to access such features as advanced search options and reports, coworker teams, and member permissions that were only available on the Plus plan without having to pay for a subscription.

I'm not sure I understand what you mean by "the profits are once again focused on the US." Could you please clarify?

As for posting this in the Clients board, we have a specific area of the Community dedicated to announcing product updates and that's where this announcement was posted. Additionally, we are notifying all clients who will see a change to their current fees via email and on the platform. We collect user feedback in several different ways and from multiple channels. We're carefully monitoring each of those channels for client feedback.

[m_terrazas]

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Mike J wrote:

Hi Maria,

We are changing the pricing structure. Our goal is to have one fee instead of different client subscription plans. This will simplify clients’ experience and give more people the chance to access important features. For example, clients will now be able to access such features as advanced search options and reports, coworker teams, and member permissions that were only available on the Plus plan without having to pay for a subscription.

What I was saying, you're going to increase costs for customers.
I suppose that there will be many who would prefer not to have all those advantages and continue paying 3%.

I'm not sure I understand what you mean by "the profits are once again focused on the US." Could you please clarify?

I meant this "We also offer a discounted fee of 3% for eligible clients in the U.S. who pay using their checking account (ACH)."

As for posting this in the Clients board, we have a specific area of the Community dedicated to announcing product updates and that's where this announcement was posted. Additionally, we are notifying all clients who will see a change to their current fees via email and on the platform. We collect user feedback in several different ways and from multiple channels. We're carefully monitoring each of those channels for client feedback.

Yeah, I know, but it's never been a good idea for me to check out what's new on Upwork. Most of the time I find out from other people's comments that there is a new announcement.

But if you tell me that you're notifying all clients of the changes by mail, well, that's not bad.

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 Thanks for answering.

[MichaelJ]

Hi Maria,

For the discount for using ACH in the US, we already offered a discounted rate for that payment method for clients on the Plus plan. ACH is only available to users in the US, but we're always looking for ways to offer more payment options to our customers in all the different locations.

Clients are being notified by email and on the platform 30 days in advance of the change happening.

I hope this helps. Please let me know if you have other questions.

[pdestefanis]

You are charging people more! Be honest. 

You are showing the same level of honesty UpWork displayed in their previous communications, and that's why the surprise.

Many clients are just clicking on the "agree" button because they are too busy or because they need to get to their console to (and you are counting on that).

Really, really sleazy move by UpWork.

[rsp]

Mike, you’ve been asked a direct question and yet you can't even bring yourself to say the words “Yes Maria, you will be charged more”. Instead you are using misleading language like “we're changing the pricing structure” and simplifying things. This isn’t just you, it’s a problem in all the communications that have happened around this.

I’m a client with many active signed contacts. You are changing terms of that had already been agreed. In my opinion these should have been grandfathered. I can’t imagine any other brick and mortar agency or even competitors like Toptal trying this on.

I wish you were more honest and transparent about this. This behaviour has eroded my trust in you and the Upwork platform. I have billed hundreds of thousands of dollars through Upwork but now realize there is a risk of becoming dependent on this platform. It is for this reason that I will be exploring other options.

[clkagmi]

I'm very confused by the wording of the changes.

Does this mean that instead of paying a flat rate of $15 per month for my membership, I will be paying 5% of my total earnings *on top of* the 5-20% that Upwork was already charging?

Or is this 5% fee only applying to clients who hire on the platform, not to freelancers?

[gaspardjack]

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Clare L wrote:

Or is this 5% fee only applying to clients who hire on the platform, not to freelancers?

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Yes, this change is for clients pricing, not freelancers (at least for now!)

[pdestefanis]

Wait until they see more freelancers depending on UpWork for their income. They will fleece them to "for the freelancers benefit"

[MichaelJ]

Hi Clare,

This is a change to the client pricing structure, not to freelancer fees.

[pdestefanis]

The change (now) is for the clients. If they used to charge you a 3%, now you will pay 5%. A 66% increase.

[wescowley]

This is minor, but I'm curious. From this wording on the help page, it appears that the TR+ batch will now be visible to all clients, not just the ones on paid plans. Is that correct?

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• Access to premium talent, including Rising Talent, Top Rated, and Top Rated Plus.

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[MichaelJ]

Hi Wes,

That is correct, the Top Rated Plus badge will be visible to all clients.

[71a4ee34]

Personally, I'm disappointed to see this change. I wish Upwork would focus more efforts on making a stronger platform that attracts more freelancers and clients vs increasing platforms fees for clients or freelancers.

😞

Collectively Upwork is taking 25% of the first $500 earned on a project now between most freelancers and client fees. This is getting a bit too aggressive in my opinion.

Thanks!

[wescowley]

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Robert O wrote:

Collectively Upwork is taking 25% of the first $500 earned on a project now between most freelancers and client fees. This is getting a bit too aggressive in my opinion.

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The client fee does not come out of the earnings, it's on top of it.

[abinadab-agbo]

Whether on top, inside, or under it, it's all one and the same.

**Edited for Community Guidelines**

Read what you may, but the assertion there's now a 25% entropy for the first $500 spent on a freelancer, is correct.

[pdestefanis]

You are correct. It's 25% of the total amount between what they extract fromt the freelancer's fees and what they take from the client.

[pdestefanis]

[researchediting]

It's pretty funky that we now have to punch through two screens to find out if there's been any updated commentary on new features of interest. It's as if Upwork is actively discouraging conversation.

[tallyfy]

It's interesting that this thread was frozen for a while but magically "re-appeared" after the news about raising pricing had 2 - 3 days to get digested.

As a client - I'm very disappointed with this. I do not require any of the "features" offered at all. I was happy with 3% pricing and now it's 5% - all dressed up with nonsense marketing-talk that offers no benefits to me as a client.

Freelancers are going to suffer in a major way as clients (like me) begin the process of abandoning this aggressive, insanely expensive mess called Upwork. 

[abinadab-agbo]

Bang on, Amit; thank you for saying it how it is.

I hope more clients come on here to vent their outrage at the fee hike and issue similar valid threats to ditch the platform.

Who knows, if enough clients make their voices heard, together you could help yank Upwork off this path to self-destruction.

[gajjarvishal86]

Hello Mike,

This is good to know.

I would also recommend to give option to freelancer in case if they want to conver the project from hourly to fixed engagement and vice versa. I have seen that many customers are interested in fixed price instead of horuly engagement after the first round of discussion with freelancers and freelancers have no option but to revised the offer.

This option will really make the engagement smoother from both side.

Regards,

Vishal

[petra_r]

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Vishal G wrote:

I would also recommend to give option to freelancer in case if they want to conver the project from hourly to fixed engagement and vice versa.

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No need, that is already easily done on the client-side before hiring.

[researchediting]

It's not really appropriate for a freelancer to change the nature of a contract from hourly to fixed price or vice versa because they "want" to (do). Although subject to negotiation or consultation, that is entirely the client's prerogative.

[pdestefanis]

Hello, 

Yesterday as I tried to access UpWork I was received with a banner forcing me to agree to an increase in client fees to 5% (it's 3% now). This was camouflaged under the new "no subscription fees", which for those newer to the platform was the way things used to work, before UpWork started charging for things like basic reports.

Currently I am unable to access my account unless I agree to a 66% hike on the fees.

Not only I am beyond disgusted with UpWork's approach, but I'm seeking legal advice.

Has this happened to you? Did they warn you? I only received a message about they plan to remove monthly fees for "Plus" subscriptions. 

If you have been hurt with this, let me know.

[prestonhunter]

re: "Not only I am beyond disgusted with UpWork's approach, but I'm seeking legal advice"

LOL