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High Upwork fees

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Active Member
Nikola P Member Since: Jun 22, 2015
1 of 26

I know i´m not really discovering or mentioning anything new here, but it still bugs me a lot.  Don´t get me wrong, i love Upwork, it´s by far the best Freelancing platform, and the most professional.  But the fees just don´t inspire me to do much work here beside the contracts i already had before the increase happened. I know running a professional, multi country freelancing site isn´t cheap. I know having a good customer service isn´t free. And i know a site cannot advance and evolve without the necessary funding. But what´s the point of that when it doesn´t even pay off to do work anymore? I know the threshold moves back to 10% when the total earnings get over $500, but let´s be honest here. A lot of the tasks are either one time projects or have smaller budgets, and when i see that out of my $250 bid of real-cost-for-real-work , $50 will be taken away, i just loose any interest in applying for work. And that´s only a part of it, since i´m from the EU, and have one of the highest VAT in the Union, so add an extra 25%  on those $50.  I have 3 options: 

 

1.) Charge more the client to get the same amount. The client is in the disatvantage. 

 

2.) Charge the same amount, and work for less money, meaning: underpaid/work for free. I am in the disatvantage.

 

3.) Don´t apply at all.  I don´t get to work and make money, the client doesn´t get his work done and goes elsewhere to get it done, Upwork doesn´t get any fee money from my work and looses a potential client. Everybody looses. 

 

The last point might be exagerated, as there are probably other freelancers that will do the work instead of me. But what´s the point then being a constant 100% Job Success Top Rated Freelancer when you barely do any work? I doubt the goal of this site is to have excellent freelancers as a display, instead of reliable service providers aka quality work force.  Because of these policies i started looking elsewhere for work, and 95% of my clients are now working directly with me, without any platform attached. I am not writing this post to judge, offend or steam out angry emotions, i am writing it as a plea to balance things. I don´t depend on Upwork in any way as i earn my monthly paycheck from my direct clients exclusively, but i would love to do more work on the platform as well. There are specific tasks that i would like to take on, or i just know it would be a perfect fit for my skills. I enjoy providing a good service and making my clients happy, for a reasonable and fair price. It´s this fee structure that prevents me from doing that. I wouldn´t mind the VAT at all if the fees for all EU freelancers were the standard 10%, regardless of the earnings. Or at least if every freelancer could choose his plan, as i´m sure that there are ´lancers out there that have earned over 10k with a client and benefit from that 5% fee. For the rest of us, it would make sense to have the plan stick to 10% permanently. No 20% or 5%. I am pretty much sure there are other people that think similarly, or at least agree with me on some points written here. I accept constructive criticism and different opinions, but please keep this topic well argumented and polite. I am writing this in hope we can change something on Upwork for the benefit of us all, thank you. 

Community Guru
Petra R Member Since: Aug 3, 2011
BEST ANSWER
2 of 26

I build all fees and costs into the rates I charge. That's how businesses work.

 

Community Leader
Milan R Member Since: Jul 20, 2016
3 of 26

When you have jobs and good clients all the time, there is no problem to pay 20%. 

Community Guru
Tiffany S Member Since: Jan 15, 2016
4 of 26

@Milan R wrote:

When you have jobs and good clients all the time, there is no problem to pay 20%. 


 And when you have good jobs and good clients all the time, you DON'T pay 20%, because you quickly pass the $500 mark. You end up paying 10% + $50.

 

Upwork really doesn't work well for freelancers whose business model involves a lot of small one-off projects. That sucks if that's your business model (or just the nature of your industry), but those little jobs aren't profitable for Upwork. Any business is going to reward the type of business that makes it money.

Community Guru
Rene K Member Since: Jul 10, 2014
5 of 26

(deleted)
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"Where darkness shines like dazzling light"   —William Ashbless
Community Guru
Janean L Member Since: Apr 6, 2016
6 of 26

I live in the United States, and my marginal income tax rate is 25% -- and that is just the income tax rate that I pay to the federal government. I pay another 15% in Social Security taxes to the federal government -- so that's a total of 40% of my net income to the U.S. government. Then I pay about 6% of my income to the Commonwealth of Massachusetts.

 

You guys in Europe think you pay high taxes with VAT?

Community Guru
Melanie H Member Since: Nov 2, 2017
7 of 26

If you were to advertise for yourself, it would certainly cost you money.

 

If you feel you could advertise yourself just as adequately, for free (on FB, for example), then do that instead - why pay Upwork fees? But my guess is you can't, or that's what you'd be doing, and bringing in just as much money without paying anything at all.

 

As for taxes - weren't you going to have to pay those anyway? All this should already be figured into your business plan, Upwork or no Upwork.

Community Guru
Richard W Member Since: Jun 22, 2017
8 of 26

 

@Petra R wrote:

I build all fees and costs into the rates I charge. That's how businesses work.

 


Actually, savvy businesses try to charge the amount that will maximise their profits given market conditions. If they are already charging the optimum price, then an increase in their price will typically mean a fall in profits (due to lower demand). If businesses could automatically pass cost increases on to their customers without any loss of income, they would be indifferent to their costs. But that's generally not the case.

 

If you've managed to pass a cost increase on to your clients without losing money (other things being equal) then you were previously charging less than your optimum price.

Community Guru
Petra R Member Since: Aug 3, 2011
9 of 26

@Richard W wrote:

If you've managed to pass a cost increase on to your clients without losing money (other things being equal) then you were previously charging less than your optimum price.


 Yup, guilty as charged Smiley Very Happy

 

But........................... look at the OPs profile.... He could (should?) charge significantly more, too.

Community Guru
Tiffany S Member Since: Jan 15, 2016
10 of 26

@Richard W wrote:

  

Actually, savvy businesses try to charge the amount that will maximise their profits given market conditions. If they are already charging the optimum price, then an increase in their price will typically mean a fall in profits (due to lower demand).

 

In this context, this assumes that all freelancers (or, at least, a significant number of freelancers) are created equal. When a freelancer (or any other business) offers a premium service, there is no "market price" for what they provide, since it's in scarce supply elsewhere.

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