Service fees question?

jedwardmills · ‎09-14-2020

I haven't worked on upwork since 2016 but logged in today to see what had changed and I noticed that there is a new fee system in place that is sliding.

I'm confused about this. According to the fees it says:

Here's how freelancer fees work:

- 20% for the first $500 you bill a client across all contracts with them

10% for total billings with a client between $500.01 and $10,000

5% for total billings with a client that exceed $10,000

Are you telling me if I land a fixed job that is $1000

That you will take 20% of my earnings on the first $500

Then you will take 10% of my earnings on the next $500

For a total of 30%?

That seems outrageously high for a company.

That's like the IRS.

Surely this can't be true. If so I don't think I will be returning to ODESK.

I don't ever remember the fees being that high when Elance was around.

Pleae clarify.

gilbert-phyllis · ‎09-14-2020

$1000

20% of $500 = $100

10% of $500 = $50

$100 + $50 = $150

$150/$1000 = 15%

a_lipsey · ‎09-14-2020

Phyllis G wrote:
$1000
20% of $500 = $100
10% of $500 = $50
$100 + $50 = $150
$150/$1000 = 15%

Math is hard sometimes.

tta192 · ‎09-14-2020

Beware of fixed price contracts of exactly $500.00 in value - those are very often a scam!

Clients will ask for free work and will threat with paying you one more dollar just so your fee goes up from 20% to 30%

feed_my_eyes · ‎09-14-2020

Jon M wrote:

That you will take 20% of my earnings on the first $500
Then you will take 10% of my earnings on the next $500
For a total of 30%?

They take 20% of the first $500, then it decreases to 10% instead of 20% (not in addition to 20%).

But yes, Elance took a lower percentage, which is probably one of the reasons why they're no longer in business.

luce-neidert · ‎09-14-2020

Jon M wrote:

That seems outrageously high for a company.

I think so too. But I joined Upwork after this change occured and learnt on the forum that many UW users think this is normal, and wonderful, excellent business practice... I don't know if they honestly think so. I just note that these users have been around long enough to pay 10% on most of the jobs thet do. But whenever someone raises this topic, they just start praising UW for what they are doing.

gilbert-phyllis · ‎09-14-2020

Luce N wrote:
Jon M wrote:

That seems outrageously high for a company.

I think so too. But I joined Upwork after this change occured and learnt on the forum that many UW users think this is normal, and wonderful, excellent business practice... I don't know if they honestly think so. I just note that these users have been around long enough to pay 10% on most of the jobs thet do. But whenever someone raises this topic, they just start praising UP for what they are doing.

Speaking for myself, it's a business decision. "Outrageous" doesn't come into it, nor does "excellent". Upwork creates opportunities for me to connect with clients without spending a dime on marketing, and it takes care of invoicing and collecting payment which saves me both time and money. The fees that are deducted from what clients pay me are a worthwhile investment for me. Not because I've been here so long I never pay 20% any more -- I work for brand-new clients all the time and only some of them hire me for multiple projects. But it's worth it in the long run because some of them become long-term and some bring high-ticket projects. I can see that it might not work well for some freelancers, depending on their particular business models. But I'm always perplexed when people characterize it as somehow inappropriate. It's a business model.

a_lipsey · ‎09-14-2020

The length of time you've been on the platform has no relationship to the percentage of fees you pay. I pay 20% on the first $500 just as any other freelancer does. Being an old timer on Upwork or new makes no difference. We all pay the same fees.

sjbercot · ‎09-14-2020

Phyllis G wrote:
Luce N wrote:
Jon M wrote:

That seems outrageously high for a company.

I think so too. But I joined Upwork after this change occured and learnt on the forum that many UW users think this is normal, and wonderful, excellent business practice... I don't know if they honestly think so. I just note that these users have been around long enough to pay 10% on most of the jobs thet do. But whenever someone raises this topic, they just start praising UP for what they are doing.

Speaking for myself, it's a business decision. "Outrageous" doesn't come into it, nor does "excellent". Upwork creates opportunities for me to connect with clients without spending a dime on marketing, and it takes care of invoicing and collecting payment which saves me both time and money. The fees that are deducted from what clients pay me are a worthwhile investment for me. Not because I've been here so long I never pay 20% any more -- I work for brand-new clients all the time and only some of them hire me for multiple projects. But it's worth it in the long run because some of them become long-term and some bring high-ticket projects. I can see that it might not work well for some freelancers, depending on their particular business models. But I'm always perplexed when people characterize it as somehow inappropriate. It's a business model.

Precisely, Phyllis! I get nightmares thinking about doing all that work myself. 🙂

a_lipsey · ‎09-14-2020

I haven't seen anyone praise it as excellent. I've seen freelancers, including myself, find it a reasonable fee for the service provided.