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High Upwork fees

prestonhunter
Community Guru
Preston H Member Since: Nov 24, 2014
21 of 32

re: "The 20% fee is outrageous"

 

The fee is voluntary.

Nobody in the entire world is required to pay Upwork fees.

Nobody is required to use Upwork.

 

You are welcome to use other comparable services with lower fees, or set up your own website or other resource from which you market your services.

 

re: "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."

 

That is not my experience. I think if you ask most regular Forum participants, they would say that such a thing is very rare.

 

Maybe there is something about your communications with clients that lead to this.

jbmaverick
Active Member
Johnathan M Member Since: Jun 22, 2015
22 of 32

"Maybe there is something about your communications with clients that lead to this"
Seriously? Well, since my communication style is pretty consistent, please enlighten me with your logical explanation as to why the drastic change in the frequency of this happening.

"The fee is voluntary."
Well, DUH, yeah. But not really - it's not like it's a donation and I can just pay Upwork whatever I want to. It's ony voluntary to the extent of, "If you want to get any work from here, here's what it costs. If you'd like to try to live without any income, then you can VOLUNTARILY opt not to pay it."
The fact that it's voluntary has no bearing at all on the question of whether or not it's a fair or reasonable fee.

 

Just a point of information: With most successful companies, the price of their goods or services goes DOWN as they become more successful, not UP - this is due to the business achieving economies of scale.  In short, when a business is first starting out and has few customers/clients, it might need to have a 50% profit margin just to make enough absolute dollars to stay in business - but once it has, say, a thousand customers, it can usually afford to do with a lower overall profit margin. Well, Upwork isn't shy about crowing its success, but apparently, for Upwork, having twice as many customers somehow necessitates them charging twice as much for their services. (Can you spell "GREED"?)

Just out of curiosity, do you think it's fair that the freelancers should have to bear the burden of providing 80% of Upwork's total fees while clients only contribute 20%? Between clients and freelancers, who do you think generally has a greater ability to bear the cost?

And if you think a fair price for merely hosting a site where you can connect with potential clients is TWICE what you'd pay a literary agent who ACTIVELY seeks out work for you and negotiates deals...well, you're welcome to that opinion.

J.B. Maverick

tlsanders
Community Guru
Tiffany S Member Since: Jan 15, 2016
23 of 32

Johnathan M wrote:

"
"The fee is voluntary."
Well, DUH, yeah. But not really - it's not like it's a donation and I can just pay Upwork whatever I want to. It's ony voluntary to the extent of, "If you want to get any work from here, here's what it costs. If you'd like to try to live without any income, then you can VOLUNTARILY opt not to pay it."

 

Exactly: if you find it more cost-effective to work through Upwork despite the fee, then you can choose to do so. If you could generate a larger profit finding work through other channels, any sensible person would of course choose to do so. So, only those of us for whom the arrangement is profitable will choose to stay (unless we're very, very poor business people).


The fact that it's voluntary has no bearing at all on the question of whether or not it's a fair or reasonable fee.

 

Sure it does. Because, again, if what you're getting from Upwork isn't worth the fee, you will of course leave.

 

Just a point of information: With most successful companies, the price of their goods or services goes DOWN as they become more successful, not UP - this is due to the business achieving economies of scale.  In short, when a business is first starting out and has few customers/clients, it might need to have a 50% profit margin just to make enough absolute dollars to stay in business - but once it has, say, a thousand customers, it can usually afford to do with a lower overall profit margin. Well, Upwork isn't shy about crowing its success, but apparently, for Upwork, having twice as many customers somehow necessitates them charging twice as much for their services. (Can you spell "GREED"?)

 

I don't know where this "crowing" is going on. Upwork has never made a profit. Even after raising fees to stop bleeding money on the tiny jobs that were a net negative for it, the company continues to operate at a loss. 

Just out of curiosity, do you think it's fair that the freelancers should have to bear the burden of providing 80% of Upwork's total fees while clients only contribute 20%? Between clients and freelancers, who do you think generally has a greater ability to bear the cost?

 

Clients provide 0% of Upwork's fees. What the client pays is a payment processing fee that is charged to Upwork and passed on to the person processing the payment.

 

I think that's entirely fair, since Upwork saves the freelancer a huge amount of time and money while providing almost no services to the client.

 

petra_r
Community Guru
Petra R Member Since: Aug 3, 2011
24 of 32

Johnathan M wrote:


Just out of curiosity, do you think it's fair that the freelancers should have to bear the burden of providing 80% of Upwork's total fees while clients only contribute 20%? Between clients and freelancers, who do you think generally has a greater ability to bear the cost?


100% of the money comes from the clients.

Oh and the client payment processing fee is 2.75% - not 4%

 

The fee is also only 20% for the first $ 500, then it drops to 10% and eventually to 5%.

When the fee increased I recalculated my prices to take this into account, which means I was no worse off, and after $ 500 / $ 10.000 I get a rate increase.

 

tlsanders
Community Guru
Tiffany S Member Since: Jan 15, 2016
25 of 32

Johnathan M wrote:

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.



Well, that's hardly surprising, since you're raising your rates and then announcing to client's that you'd work cheaper if you didn't have to pay Upwork fees. Sounds more like YOU'RE asking to work outside of Upwork, but doing it in a way that makes the client think it was his idea.

prestonhunter
Community Guru
Preston H Member Since: Nov 24, 2014
26 of 32

J.B. Maverick:

I do not doubt that you are sincere.

 

But the types of questions you are asking just don't hold resonance with me.

 

When it comes to Upwork, I'm clearly not as philosophical as you are.

 

I'm more of a mercenary than a philosopher.

 

Consider this case study:

 

John worked for 10 hours on "Platform A". He earned $1000.

 

John worked for 10 hours on "Platform B". He earned $2000.

 

He did the same type of work on both platforms.

As a mercenary, I look at these numbers and think that Platform B is better. Because John earned twice as much.

 

But I haven't told you the full story yet:

 

Platform A charges a 5% fee.

Platform B charges a 30% fee.

 

The philosopher looks at the 30% fees and says "That is bad." Or "that is unfair."

 

The mercenary doesn't care that Platform B has an "unfair fee percentage." The mercenary is just glad that he earned twice as much money working on Platform B.

gina-herrera
Community Guru
Gina H Member Since: Aug 10, 2020
27 of 32

Preston H wrote:

 

The mercenary doesn't care that Platform B has an "unfair fee percentage." The mercenary is just glad that he earned twice as much money working on Platform B.


I fall somewhere in the middle of this, since the fees do somewhat irk me, but at the same time there is just no way I would have the time or energy to source out the amount of high-quality, reliable clients that I can find here with some quick scrolling and reading. The time that saves me is already worth it because that's so much less time I would have to be productive and earn money.

Petra had mentioned that clients benefit very little from the platform; financially, sure, but at the same time I do think that it is almost impossible to find another freelance site with qualified candidates available on tap like this - it saves them a LOT of time and effort to be able to make a job post and have some indicators such as top rated, earnings, etc. to give them a filtering method to choose someone. So I kind of genuinely do believe the fees should be shared, but at the end of the day it still won't stop me. My earnings are still worth it. And Petra's point about building the fees into your pricing is 100% true because it works for me, the only time I ever mention the fees is if the customer tries to haggle me down a bit and then I say I'm sorry but that's not possible due to the hit I'm taking from site fees, unfortunately that is the price. If they protest a second time, I don't want to work with them anyways since it's asking for trouble. While this doesn't work for everyone, if you have the skills / talent / reputation, 9 out of 10 times people aren't going to try and haggle over it.

craftandsew75
Active Member
Ruby B Member Since: Jan 19, 2020
28 of 32
Yes, but as I said, it has to be relative. There are jobs that are highly skilled but taken for granted and treated as those we are still living in the dark ages. Such jobs are manual jobs and deserve to be paid in pounds/dollars and not in nickles/pennies.
Incidentally, to gauge if there is unfairness, it would be interesting to know what services of work people provide if they're fighting off work and making £500 in a few days, against those who are equally talented in their own right, but not in a position to achieve that because of the 'worth' of their services.
wlyonsatl
Community Guru
Will L Member Since: Jul 9, 2015
29 of 32

Upwork can't report earnings to its shareholders even with its current fee for freelancers, so don't expect any reduction in those fees for the foreseeable future.

purplepony
Community Guru
Pat M Member Since: Jun 18, 2016
30 of 32

Freedom of choice is a wonderful thing.  Upwork isn't for everyone.  For that matter freelancing isn't either.

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