@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.
@Nikola P wrote:
2.) Charge the same amount, and work for less money, meaning: underpaid/work for free. I am in the disatvantage.
Not really. Not if you're thinking like a business person.
Different estimates place the percentage of time a freelancer spends on unpaid tasks such as seeking out work and invoicing at between 30% and 70%.
Let's go with the optimistic view and say that your administrative investment in finding new clients, billing them, collecting, etc. would be 30% of your work time.
That means that in a 10 hour work day, you can bill 7 hours. Or, you can work through Upwork and bill 9.5 hours.
If your hourly rate is $20/hour, you can bill $190 through Upwork and pay $38 in fees, for a net revenue of $152. Or, you can bill 7 hours outside of Upwork with no fees for a net $140.
Of course, that assumes that you don't spend a single dime on your efforts to solicit business...which also means that your efforts to draw in new clients are probably much less successful than Upwork's widespread advertising campaigns.
If you raise your rate to $20 you'll earn same as before, and no client will be on disadvantage because they choose to hire someone for $20 and not $15. I would recommend to go for the first option and continue applying for jobs.
@Sam T wrote:
Sad to see the Upwork fanboys and girls dismiss the high fee's argument.
You mean the people who make a healthy profit through Upwork and find the fees to be worthwhile?
I'm not sure why you think it's "sad" that others are successful, but it doesn't speak well of you.
I know that I've also said this before. If you are working through Upwork, you are working for yourself. You are not working FOR Upwork. You can set your fee to whatever you want. If you believe you can make more locally, doing the job you are doing, you should definitely do that. I have clients on Upwork and I have local clients. But I live in a small city and local clients are not readily available. Plus, cost of living differences and all, my clients on the coasts will pay me more than my local clients for the same work and I don't have to move and I can continue to live in an area with a lower COL. If I did not use Upwork, I would have to be out every day drumming up clients. I would incur significant costs...website, brochures, lunches, travel, other advertising, etc. I may go weeks and weeks between projects. Plus it's tiring. To me, Upwork is a luxury. It is a cost I incur to match my skills with clients who need to hire a small (1-person) company. If I have 2 days that I don't have a job, then I can spend an hour replying to bid invitations and get something in a matter of hours to fill that time. Where else can you do that?
Also, after just $500, the fee drops to 10%. At this point most of my clients are able to hit that within the first day of me working for them. That's nothing compared to advertising. If you are truly offering a service that people need, with experience to back up your fee, people will pay. If you don't, then it's possible this isn't the right platform for your skills. I read here all the time about people not being able to find work. I turn work away every.single.day. here on Upwork.
The 20% fee is outrageous - you can't possibly defend that. Hell, a personal literary agent doesn't charge that much!
Even 10% is way too much once you learn that they only charge clients 4%. Yeah - the companies that have money only have to pay a measley 4%, while Upwork takes 20% out of the pockets of the starving freelancers. Whose idea of fair is THAT?
So, Upwork gets a total of 24% of every job - and freelancers pay 80% of that total. How fair do you think that fee structure is NOW? Huh?
I can tell you this much, too - and this is another clear indication that the freelancer fees are way too high. Before Upwork raised the fees from 10% to 20%, I think I had one client in three years ask about paying me outside of Upwork (in order to get a lower rate - because I do build Upwork's fees into my fees and I tell clients that right up front, that part of the reason for my fee is that when they pay me $100, I only end up getting $80.) Since Upwork DOUBLED their freelancer fees, I'd estimate that about three-out-of-four of the many clients I've dealt with have asked me about making payment arrangements outside of Upwork.
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