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Undercutting

mikki_james
Active

Hi Everyone,

I'm fairly new here on Upwork, so I hope I have placed my question in the right forum.

 

Okay, here's my question.

Why do people insist on underbidding on their proposals? For example on almost evey job I have submitted a proposal for has a low bid for like $4.00. These are jobs that would obviously pay out at a much higher rate. I cannot help but find it rather frustrating. I do realize this is a universal platform, but come on, give a girl a break. I didn't spend 6 years of my life in college just to pimp myself out for $4.00 an hour. LOL!!! Seriously though, is it simply to rack up work hours and a reputation or am I missing something here?

 

Thanks for letting me share!

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evetodew
Community Guru

Mikki,

 

To add to what Dan said, which is very much true... You have your own strengths and Dan pointed them out - you're a native English speaker. That's a great strength, since the language barrier is gone. You have years of experience behind your back. Maybe you have solid education or some specific experience which you're proud of. I am sure you have way more strengths than the low-ballers.

 

So, here's the idea. If the low-ballers' means to win a project is underbidding, then don't fight the 'battle' with their weapons. Fight their weaknesses with your strengths. So, pick your strengths and reinforce them, by subtly (or not so) mentioning them in your overview or/and portfolio.

 

Don't play the low-ballers' game. Don't underbid yourself. Have pride and confidence in yourself, and clients will respect you for that. You'll attract the right type of clients. Low-ballers usually attract the wrong type of clients. From personal experience.

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24 REPLIES 24
qqsolutions
Community Guru

Hi Mikki,

In Maxico you cannot live with $4.00 per hour but in some countries like Bangladesh, India, Pakistan and Phillipine it is perfectly of to get $4.00 per hour.

 

Let me give little more shock to you.. 

 

I am both a client and freelancer on upwork. I can tell you that some freelancers do write in their bids that they are willing to work @$2 and $1 per hour as well..

 

So brace yourself.. and Welcome to International market place !!

Hi Muhammad,

 

Thank you for responding to my query so quickly and the advice ! Yes, it is a shock, I could not imagine working for such low wages with such a high cost of living where I come from. So any advice on how I should proceed, now that I have been enlightened? I have a very fair and accurate Hourly bid posted on my profile that is backed by my skill level and experience, though I'm already underbidding that in a effort to get my foot in a door somewhere. With Upwork's new percentage rate it puts me about at the minimum wage level in the US and this is very discouraging.

 

Best,

Mikki

Hi Mikki, 

 

Here is my advice.. Never do underbidding.. It will not give you any advantage.. Clients do understand everything already. So place bids with the hourly rates best suits to you and hope for good. I also belong to same region where people are willing to work for less than $3 per hour as well.. But if you look at my profile, I am charging @$8.70 per hour as my normal rate..

 

So, just place yourself in shelf which is made for you.. donot under or over bid always

Hi Muhammad,

 

Thank you for your advice. I was beginning to think that I had this platform figured all wrong. Now I feel that I have made the right decision and intend to stick to my guns and like you said 'hope for the best' !

 

Best,

Mikki

Mikki, you'll learn which clients are just looking for bottom feeders, and which clients are willing to spend decent money on decent quality.

 

Leave the murky depths of the freelancing pond to those bottom-dwellers who pimp themselves out at $ 6 or $ 7 and then pretend to be "clients" farming the bottomfeeder cr*p out to even cheaper pondlife at $ 3...

 

The clients who have standards and want quality won't even look at nonsense such as that - so just ignore it.

 

 

I can understand your feeling Petra.. But you have to accept it that you are in a global market place.. where not every one is living with same peace of mind.. Some are looking for money to buy a car and on other hand some are looking for money to buy only food..

 

Accept and honor the golbal market place.. else ,, leave it and find a job in Italy..


@Muhammad Saif U wrote:

I can understand your feeling Petra.. But you have to accept it that you are in a global market place.. where not every one is living with same peace of mind.. Some are looking for money to buy a car and on other hand some are looking for money to buy only food..

 

Accept and honor the golbal market place.. else ,, leave it and find a job in Italy..


 Excuse me? What on earth are you talking about? The global marketplace works just fine for me.

 

I am perfectly happy with the global marketplace and I simply stated that the bids from the farmers and fake clients who farm out cheap work at even more bottom-feeder rates do not affect me because the clients who would consider working with me would not touch that end of the market any more than the bottomfeeder clients would be able to hire me.

 

I have a few points on this.

 

Firstly, the people subcontracting for even cheaper may be a pain but are on a hiding to nothing.  They will make very little money and run risk on both side.  They are not in control of the delivery, they also run credit risk that they pay their sub-contract and don't get paid themselves.  If people want to do this then let them get on with it.  Chances are sooner or later they will be out of pocket with a stuffed reputation anyway.

 

It is a global market.  If you want to compete with people in the Philippines as virtual assistants, data entry or the like then I wouldn't bother.  It is the BPO centre of the world, an abundane of people who speak very good English, are computer literate and have degrees.  India was the centre for this stuff, more now Manila.  In the UK if you phone your bank for standard items there is a reason the person you talk to is in Manila or Mumbai rather than Manchester.  You really are not going to compete on price.

 

I also wouldn't go round undercutting.  It is easy enough to see what people have billed in the past.  If Muhammad is ok working for 6 or 7 an hour, good luck to him.  If he then bids 30 he likely won't get it, the hirer knows he will work far cheaper.  I can see a rationale for building a reputation by getting early jobs but it is really not a great plan, you are likely stuck at where you pitched that level.  Set your rate where you are happy.  Again, good luck to Muahammad if that rate works for him, his circumstances are different to mine, as he points out.

 

You therefore need to be able to do something someone bidding half the price can't do.  Do you have location specific qualifications a guy in Vietnam cannot compete with?  If you are a US articled lawyer then you probably do.  If you enter data in spreadsheets then I'm afraid you don't.

 

From my point of view my rate is at the high side (I am new to this BTW).  I am completely confident nobody in the lower cost locations can do what I do for the simple reason my experience only exists in 3 or 4 cities in the world, let alone countries.  If it doesn't work so be it but I won't be lowering it.  A consulting firm would charge many times what I charge for someone with a fraction of the experience, temp hiring for a newly qualified accountant is similar to what I charge but the hiring company needs to add overhead, supply computers etc.  and I have over 20 years experience on them.  I'm still cheap for what you get.

 

 

As a serious client, I usually just ignore lowball bids. I rarely even click on them or look at them. Because I am busy and don't have time to pay people to produce garbage. 

 

I like saving money. But I also like saving time.

 

And I don't care about the cost of living in anybody's country.

You can combat low fees offered by people in other countries by stressing the benefits of working with local contractors. I am a web designer so I tell them "We are located in {INSERT YOUR CITY AND STATE} not the far east, and easily contacted. You will be able to call any time with any questions and we will speak to you in English. You will not have to deal with language barriers, cultural differences or time zone differences of 12-14 hours when communicating with your designer."  That usually takes away the low price advantage of foreign designers for me.

Hi Dan, 

 

Great advice ! I have actually begun using the header AMERICAN/UNLIMITED INTERNATIONAL RESOURCES on my cover letters in an effort to distinguish these very points myself. Your advice has backed up my theoretical idea that maybe some of the clients out there wish to avoid such headaches. Thank you for your response and encouragement!

 

Best,

Mikki

Hello Preston,

 

Your response as a client is very encouraging. 

I must admit I was harboring serious doubts about the quality of clientele that Upwork attracted, not to mention the moral fiber. My thoughts were ranging from disbelief to disgust and just about into pi**ed mode when I decided to reach out. (Of course I am referring to those clients recruiting from the US who know and understand our economy.) Your response however lends hope for the future possibilities I was just about to give up on. I suppose every freelance newbie goes through such insecurity at some point or another. That being said, thank you again for your supportive encouragement!

Best,

Mikki

Petra,

WoW ! This sounds like there are sharks circling in our midst ! lol....

 

But also sounds like great advice. I have a pretty strong determination to see this through and feel better about my choices now however. Since I have moved from the awesomeness of the Yucatan here in Mexico back to the upper northern region of Monterrey, it pretty much is my last resort to supplimenting my income these days. These areas are like night and day and though I owned and operated a thriving business down south, it simply isn't possible here, hence my discouragement. Thank you for taking the time to respond to my query.

 

Best,

Mikki


@Mikki J wrote:

Petra,

WoW ! This sounds like there are sharks circling in our midst ! lol....


 I wouldn't call pondlife "sharks" - sharks are at or near the top of their foodchain......

 

Seriously, the best idea at Upwork is to either do your own thing, and march to the tune of your own drum, (which is easier with a history and a proven high quality track record) or, if you WANT to draw comparisons, compare yourself to your peers.

 

Think of watches.

 

You can buy a watch at the dollar store for next to nothing and it will keep the time and tell you when you should be home for lunch.

 

Or you can buy an Armani watch for $ 300

 

Or you can buy a Rolex for $ 3 000 to $ 10 000.

 

Do Rolex worry that Armani sell (arguably more beautiful) watches at a tenth of the price? OF COURSE not!

 

Does Armani worry that there are watches for Sale at 1% - 2% of the price of theirs? I doubt it.

 

You are not EVER competing with the $ 3 - $ 6 Dollar an hour wannabes, or the parasitic wanna-be clients that then farm the work out at even less, leeching of those even less fortunate and more desperate.

 

They are NOT your competition!  The clients who hire them won't hire you anyway because they either plain can't afford you, or because they haven't yet learnt that they get what they pay for no matter where the freelancer is from.

 

Ultimately, either way, your competition are those at roughly the same level with the same attributes, features, and advantages, with maybe a bit more feedback and / or experience. THOSE you can pay attention to, see what they do well, how they market themselves, how they position themselves in the marketplace.

 

Take note of what works for them.

 

Any moron can compete on price. It's a race to the bottom that has ultimately no winners, only losers bragging how they can hire for $ 1 or $ 2 until their seedy, shady game blows up in their faces eventually or someone comes along and undercuts them. As all they have going for them is being cheap that's when they are eventually toast, or carry on dwelling at the bottom. Let them, the clients, farmers, and bottom racers in that segment all feed off of each other in a market that need not concern you except for entertainment value. You don't want to be there.

 

Pay attention to your market, your peers, and concentrate on your strengths. Find your niche, work hard, don't give up!

tlsanders
Community Guru

Mikki, I think you're asking the wrong question. There are a variety of possible reasons, some of which have been explained here. But, how does understanding the motivations of those who choose to work for $4 help you build a stronger business and make more money? Don't concern yourself with them. Figure out what makes you worth the rate you're asking, pitch that, and you'll get the clients you want to be working with.

mariawicz5
Community Guru

There are a lot of crap jobs out there, but keeping aiming for the ones that are as high level as you are. Don't fall into the trap of accepting lower paying jobs to get started here and build feedback. Usually cheap clients are bad clients and it's going to end up hurting you in the long run. Good luck!

Hi Maria,

 

Thank you for responding to my query. Those were my exact thoughts in the beginning, though getting passed over again and again had me doubting my own judgement. Your response has had the desired effect and now I am more determined than ever to succeed at the rates I feel are more than appropriate for the quality of my work. Thank you for your support!

 

Best,

Mikki

evetodew
Community Guru

Mikki,

 

To add to what Dan said, which is very much true... You have your own strengths and Dan pointed them out - you're a native English speaker. That's a great strength, since the language barrier is gone. You have years of experience behind your back. Maybe you have solid education or some specific experience which you're proud of. I am sure you have way more strengths than the low-ballers.

 

So, here's the idea. If the low-ballers' means to win a project is underbidding, then don't fight the 'battle' with their weapons. Fight their weaknesses with your strengths. So, pick your strengths and reinforce them, by subtly (or not so) mentioning them in your overview or/and portfolio.

 

Don't play the low-ballers' game. Don't underbid yourself. Have pride and confidence in yourself, and clients will respect you for that. You'll attract the right type of clients. Low-ballers usually attract the wrong type of clients. From personal experience.

tlbp
Community Guru

Every market has levels and price points. If there are a greater  number of consumers looking to purchase at the lower price point, you can either offer your services to the masses or compete for fewer opportunities in the premium range. 

Hi Evelina,

 

WoW! Talk about putting things into perspective! Sounds like advice my own family would have given, 'pick your battles to win the war' so to speak. Being new to the world of freelance has certainly become quite the challenge. However, as you have pointed out focusing on ones qualifying talents will certainly bring out the best in both myself and my prospective clients. After reading your response (and those of many others here) I have decided to go on the offensive rather than defensive mode. I have began revamping my overview, website, covers and cv in order to reflect this new prospective. Since I am hopeful for a long-term position, I feel that it is necessary to dig in and prepare for the long haul, albeit from either direction. Thank you for responding to my query and for your support.

 

Best,

Mikki

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