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Service charge / commission must be reduced

mainurbd
Active Member
Mohammed Mainur R Member Since: Aug 2, 2016
11 of 16
Thanks for all the explanation about fees/ rate.
I agree that upwork must remain alive to give us the opportunity/ platform.

I talked with several freelancers in Bangladesh and I tried to share their common thoughtSmiley Happy but all the received breliant explanations are meaningfull. Thanks for sharing your thoughts.
resultsassoc
Community Guru
Bill H Member Since: Aug 18, 2017
12 of 16

Others have explained Upwork's need for a fee. I'd like to add a couple of things:

 

Upwork has spent massive amounts of money to become the 800-pound gorilla is a crowded industry. Its business model is high volume/low margin. The bulk of jobs it attracts are for commodity services, such as banners, cold calling, data entry, etc. The bulk of freelancers provide commodity services. Your jobs have mostly been $10 one-offs. The $2 that Upwork takes is probably the minimum transaction fee.

 

Its revenue sources are freelancer membership fees, fees for premium postings and premium bids, and commissions. The first three sources are basically free money, but don't pay the rent. Upwork has automated nearly everything possible; the costs to create and maintain that are very high. Simply recreating the logic needed to do that effectively would take me probably 120 hours minimum, and my standard hourly rate is $150. I've created the logic for three analogous businesses, and it is incredibly difficult. The only competitor who ever ran a successful partly-automated service, with significant human intervention, was ProSavvy. Its lowest price category was "Under $5,000." Most of the jobs were for highly-skilled consultants and were fixed-price. The lowest bid I ever made was for about $2,500. It was bought by e-works, which changed the name to eworks-markets. Its new parent company went bankrupt, and took the profitable freelancer service with it.

 

Upwork is the worst possible freelancer site, except for all the rest. No other sites really compete. The fee structure rewards freelancers who take on long-term clients; the ranking and evaluation structure favors "farmers," who use a North American front to farm out work to $2/hour third-world providers.

mwiggenhorn
Community Guru
Mary W Member Since: Nov 10, 2014
13 of 16

Most other sites that have work relevant to me (paralegal) charge 25-40% and have nothing in place to assure payment.

petra_r
Community Guru
Petra R Member Since: Aug 3, 2011
14 of 16

@Bill H wrote:

Others have explained Upwork's need for a fee. I'd like to add a couple of things:

 

Upwork has spent massive amounts of money to become the 800-pound gorilla is a crowded industry. Its business model is high volume/low margin. The bulk of jobs it attracts are for commodity services, such as banners, cold calling, data entry, etc. The bulk of freelancers provide commodity services. Your jobs have mostly been $10 one-offs. The $2 that Upwork takes is probably the minimum transaction fee.

 

Its revenue sources are freelancer membership fees, fees for premium postings and premium bids, and commissions. The first three sources are basically free money, but don't pay the rent. Upwork has automated nearly everything possible; the costs to create and maintain that are very high. Simply recreating the logic needed to do that effectively would take me probably 120 hours minimum, and my standard hourly rate is $150. I've created the logic for three analogous businesses, and it is incredibly difficult. The only competitor who ever ran a successful partly-automated service, with significant human intervention, was ProSavvy. Its lowest price category was "Under $5,000." Most of the jobs were for highly-skilled consultants and were fixed-price. The lowest bid I ever made was for about $2,500. It was bought by e-works, which changed the name to eworks-markets. Its new parent company went bankrupt, and took the profitable freelancer service with it.

 

Upwork is the worst possible freelancer site, except for all the rest. No other sites really compete. The fee structure rewards freelancers who take on long-term clients; the ranking and evaluation structure favors "farmers," who use a North American front to farm out work to $2/hour third-world providers.


 Bill, **Edited for Community Guidelines**.

 

Let's see your data for all those claims.  Otherwise one will have to assume you just made it up as you went along....

resultsassoc
Community Guru
Bill H Member Since: Aug 18, 2017
15 of 16

Petra,

 

You  are free to assume whatever makes you feel good. That the bulk of the jobs and the bulk of the freelancers are in commodity services is easy to derive from Upwork's own information. The sources of revenue are self-evident; if you're aware of another revenue stream, I'd like to know about it. The informmation about ProSavvy/eworks-markets is in the public domain. If you believe I am inventing the cost of developing and maintaining software that automates the many functions that Upwork performs, I suggest you talk with a high-end developer.

 

My  rate is public information and visible on my profile. Mohamad's job history is public information and on his profile. I developed the logic for a small competitor to Alibaba; if you wish, I'll ask the client to call you. Perhaps you could tell me why she needs to call you. I developed the logic for a physicians' second opinion website; I can ask the client to call you, I suppose, although to what end I'm not certain.

 

What individual behaviors are incentivized by Upwork's practices is hardly a reach.

 

What claims do you assume I am inventing as I go along? You are a linguist and writer who is very good at exploiting the Upwork systems that are in place. I congratulate you. I'm curious about why you believe that qualifies you to critique business models, technology costs, organizatiional behavior and similar issues I've been addressing successfully for the past several decades?

melaniekhenson
Community Guru
Melanie H Member Since: Nov 2, 2017
16 of 16

I'm not totally in love with the rates but how much would it cost me to advertise, and even if on "free" channels like Facebook, how much given my hourly rate would I be spending of my time each month grinding away trying to grab people on social media or drag them over to my online portfolio? With way less exposure, BTW, than here.

 

Think of it as your cost of advertising. Smiley Wink In a way (since this is not a complete analogy, but you get the idea), Upwork is doing that for you. It's a service. We pay for it. And we make money. Better money, really, than any similar platform I've investigated, so keep smiling and keep working and keep your chin up. Smiley Happy Building a one-stop reputation and having your work just grow because of that is worth the expense all by itself, IMO.

 

Hope this made sense, I had a hell of a week, my head is swimming and right now I'm running on caffeine and...well, okay, just on caffeine.

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