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analyst_nemanja
Community Member

Why do I ever accept fixed price projects? NO MORE!

This is a sort of a rant and I just need to vent off a bit. I would say that I am a pretty successful freelancer - I am top rated, have completed 60 jobs at a 99% success rating. 95% of my clients would recommend me and I have made over $20k thus far (almost 90% of that over the past year). So I am very grateful to Upwork for the opportunity I have here.

I am mad at myself for accepting fixed price work. Here's a piece of advice for all newbies who may be reading this - if a client insists on fixed price work, and if you have a feeling that the budget just might be a bit on the low side - insist on an hourly contract or run for the hills!

From my experience, 95%+ of the time, fixed-priced contracts are used by stingy clients who are well aware that the job will take you far more time than they would like you to budget in your quote. Essentially, they are aiming at a 30% to 50% discount to your hourly rate. And don't think they will reward your hard work with a bonus. Nope. 

Frankly, I think that all freelancers should boycott fixed-price contracts. Maybe in that way, behaving like a union, we may achieve better terms overall, for each of us.

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wlyonsatl
Community Member

Nemanja V.,

 

I'm sure there are certain common types of work here on Upwork where client and freelancer can agree on a fixed price that is acceptable to both, such as translating a single page of newspaper-grade French into Spanish. 

 

But there is no doubt there are clients who only present a partial picture of the final work product they expect from the freelancer. In my experience, this may be due to a) the client's lack of understanding of their project (which is not necessarily due to dishonesty) or b) the client's dishonesty (with a plan from Day One of the project to add more work without more pay for the freelancer).

 

In my little corner of Upwork heaven I rarely do fixed price projects because a) is common and b) is not uncommon. I do apply to fixed price projects, but always let the client know that I only work under hourly pay contracts.

 

I haven't kept track, but I'd guess that only a few of these potential clients have changed their pay rate from fixed to hourly and engaged my services. And that's fine. But some clients really have no idea what their projects should cost, so there's nothing wrong with submitting proposals (fixed price or hourly) that are above what the client has indicated in their Upwork ad they are looking to pay.

 

And a fair few hourly clients have complained during the later stage of their projects about the total cost of my work for them in the same messages in which they have added new instructions for yet more work for me to do on their project. They don't appear to see the irony in that.

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moonraker
Community Member

That might be applicable to your line of work, but not necessarily for everybody.

As a writer, I'm often able to get a reasonable idea of how long a particular job would take. It ends up taking a little longer at times, but a little shorter at others. And most of my clients have probably been on a fixed-contract basis with most of them not being at all 'stingy'. 

If you can't get an idea of how long a job will take then by all means use an hourly contract - I recommend doing that myself. But recommending a blanket avoidance of fixed-price contracts means fewer opportunities in an already very competitive market. 

So, my advice to newbies is not to avoid fixed-price contracts. Instead, try and get sufficient information on a job to get an idea of how long it will take and then charge accordingly. 

In the financial modeling line of work, it is next to impossible to estimate how long a project might take. I would have to spend 3 or 4 hours, at least, going through their draft model (which they usually provide) to calculate all implications of specific requirements. Just a tiny input here or there may implicate a few hundred extra lines in an Excel sheet.

Non-stingy clients who need company financial models are well aware of it and they pay per hour.


Nemanja V wrote:

In the financial modeling line of work, it is next to impossible to estimate how long a project might take.


Well, that's YOUR line of work. 

Most freelancers are working in a different line of work.

Do I have the right to state my experience with my line of work, or is it a problem?


Nemanja V wrote:

Do I have the right to state my experience with my line of work


Of course you do. I think it got problematic when you declared that *all* freelancers should boycott fixed rate contracts just because they may or may not work for what you do. 

I stand corrected. Still, we are not in the court of law here, so I don't think that I should be held to account for one word, without taking context into account. Anyone who reads this thread will understand that my advice should be considered for financial modeling, not all kinds of work. Thanks for your input.


Nemanja V wrote:

Do I have the right to state my experience with my line of work, or is it a problem?


The problem is giving out poor advice to new freelancers.

Many of them already struggle to find work because there is so much competition. If they followed your advice then it would become even harder for them. 

At no point did your original post mention that your advice applied only to people in your line of work. In fact, it specifically says, and I quote verbatim: "Frankly, I think that all freelancers should boycott fixed-price contracts"

New freelancers should apply common sense. When I was a new freelancer, I accepted any kind of work offered to me, with very little regard for the price, as long as it was related to my field in some way. And I was able to discern between advices given to newbies, intermediate and advanced freelancers.

Without applying common sense to one's particular situation, I don't think that any freelancer will get very far.

Yes, Nemanja, financial modeling is a job type where predicting the total amount of work that will be required is rarely possible, especially when dealing with young clients who have little to no experience creating such models and don't really understand the financial complexities of their own businesses.

 

Nearly all of my Upwork projects involve financial modeling and I don't remember the last time I did one on a fixed price basis.

 

I don't mind clients with budgets smaller than their projects require. I just leave them for other freelancers to work with.

jr-translation
Community Member


Nemanja V wrote:

This is a sort of a rant and I just need to vent off a bit. I would say that I am a pretty successful freelancer - I am top rated, have completed 60 jobs at a 99% success rating. 95% of my clients would recommend me and I have made over $20k thus far (almost 90% of that over the past year). So I am very grateful to Upwork for the opportunity I have here.

I am mad at myself for accepting fixed price work. Here's a piece of advice for all newbies who may be reading this - if a client insists on fixed price work, and if you have a feeling that the budget just might be a bit on the low side - insist on an hourly contract or run for the hills!

From my experience, 95%+ of the time, fixed-priced contracts are used by stingy clients who are well aware that the job will take you far more time than they would like you to budget in your quote. Essentially, they are aiming at a 30% to 50% discount to your hourly rate. And don't think they will reward your hard work with a bonus. Nope. 

Frankly, I think that all freelancers should boycott fixed-price contracts. Maybe in that way, behaving like a union, we may achieve better terms overall, for each of us.


Just because you are unable to estimate the time needed on the information given you either do not request enough information beforehand or you are working to slow. There is no reason not to work on fixed-rate contracts as long as you know how to manage your time.

Funny how my per-hour clients don't think that I am working slowly or not being able to manage time. See my response to the poster above.

petra_r
Community Member


Nemanja V wrote:

Frankly, I think that all freelancers should boycott fixed-price contracts. 


What? Even those freelancers who know how to scope and price contracts effectively? 

 


Nemanja V wrote:

From my experience, 95%+ of the time, fixed-priced contracts are used by stingy clients who are well aware that the job will take you far more time than they would like you to budget in your quote.


Then you are not choosing your clients correctly.

And who cares what clients "would like you to budget in your quote?"

You quote your rate and the client can take it or leave it.

 


Nemanja V wrote:

Maybe in that way, behaving like a union, we may achieve better terms overall, for each of us.


That makes literally no sense at all.

The problem isn't with fixed rate contracts as such, the problem is with insufficient project management. If you choose clients carefully, clarify the scope and nail down the details before accepting a contract at the rate/price you want, fixed rate contracts are not an issue.

I am entitled to my opinion, and your tone is not very appropriate. I believe that I have made myself clear in the original post, if not, the explanation is in one of my answers above.

Nobody is going to decide whether or not to bid on fixed-price contracts based on my opinion alone, obviously, so why the fuss? My post is directed to those who have already had bad experience with fixed-price contracts, but may think the problem is in them.

wlyonsatl
Community Member

Nemanja V.,

 

I'm sure there are certain common types of work here on Upwork where client and freelancer can agree on a fixed price that is acceptable to both, such as translating a single page of newspaper-grade French into Spanish. 

 

But there is no doubt there are clients who only present a partial picture of the final work product they expect from the freelancer. In my experience, this may be due to a) the client's lack of understanding of their project (which is not necessarily due to dishonesty) or b) the client's dishonesty (with a plan from Day One of the project to add more work without more pay for the freelancer).

 

In my little corner of Upwork heaven I rarely do fixed price projects because a) is common and b) is not uncommon. I do apply to fixed price projects, but always let the client know that I only work under hourly pay contracts.

 

I haven't kept track, but I'd guess that only a few of these potential clients have changed their pay rate from fixed to hourly and engaged my services. And that's fine. But some clients really have no idea what their projects should cost, so there's nothing wrong with submitting proposals (fixed price or hourly) that are above what the client has indicated in their Upwork ad they are looking to pay.

 

And a fair few hourly clients have complained during the later stage of their projects about the total cost of my work for them in the same messages in which they have added new instructions for yet more work for me to do on their project. They don't appear to see the irony in that.

Thank you, Will, for a kind and thoughtful reply. What is your line of work?

Edit: I see you are in finance as well. So we understand each other. Thanks again. 

kinector
Community Member

I love doing fixed price jobs. With those I am free to exercise value-based pricing that always works to my advantage. Because that's how I do business. Hourly-based billing is hardly different from normal employment and therefore not too lucrative to me.

Nemanja, you run your own business, you're in charge. You choose your clients, you manage them, you define what you charge and how you charge them, and you are responsible of making them happy. When done right, you get what you are promised most of the time on this platform and elsewhere.

This is not a platform issue.

Forcing everyone else to to comply to your approach is not very considering, so let's skip that.

If this platform does not fit the business you're hoping to do, you are free to explore other ways. Hoping this platform to quickly change to your preferences, considering its size and history, is a bit of a long shot compared to the ease of changing your own business, as indeed only the latter is your own choice.

Good for you.

magreth
Community Member

Financial modeling and Accounting are tricky areas. Hourly jobs are safer. Personally, I avoid fixed price jobs and situations where client is more worried about the number of hours that I will charge. I also avoid adverts that say "very simple, should take a few hours". If it's that simple, then you are not needed....

I couldn't agree more, Maggie C.

When a potential client tells me how simple their accounting or financial modeling project is, I assume they really have no experience or expertise behind their optimistic estimate. If they did know, they could surely spare the hour or two they think is needed to do it themselves.

But this sort of claim does tell me they have a limited budget, which makes Uowork's hourly pay protection especially important.
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