We have heard about the growth in freelancing and the increasing numbers of people working independently. The numbers are estimated to be as high as 42 million in the US only. It is no wonder there are many different sites that freelancers can use to sell their skills. One such site is Elance.com which uses a method of bidding on work as most of them do.
On a site like this, a work project is posted and a bidding war begins. If you have a free membership on Elance, you can no longer get to see what price others are bidding and this tends to put you at a huge disadvantage in winning the project. Those with paid memberships, however, do see what their competition is bidding. According to Elance, “ Previously, all freelancers could see the minimum, average and highest proposal price to help determine their own rate. Starting August 26, 2013 these amounts will only be visible to freelancers with a paid membership plan. With this change you’ll now have extra insight over much of your competition.”
The result is that those who are willing to work at rock bottom prices tend to win out. This auction styled event of bidding on freelance work is extremely difficult to compete especially when up against freelancers living in third world countries.
Clearly, a freelancer in North America cannot make a living on third world wages. In a recent linkedin freelancing group conversation titled “People per hour, elance, odesk, freelancer. Good or bad places to find work?”, a professional graphic designer took the time to prove his point, by giving several examples of current offers of bidding on freelance work that appeared on Elance and Odesk, that working for the wages offered is, as he puts it “absurd”. Examples, of the bidding on freelance work discussed, included a flyer designed for a fixed price of 20$! Design a logo for 10$?! A gif animation for 5$?!
We can all agree that at those prices it does seem absurd. Consider how long it takes to create a flyer or design an image. Consider the additional time you take to bid on the project and discuss the parameters with the client. Many freelancers often also complain that even if a company posts a rate that they are willing to work for, the companies end up getting lower bids outside the range and choose those lower offers.
In order to avoid wasting your time bidding for companies such as these it is important to look at the history of what a particular company tends to pay for projects. Unfortunately this information is not always available. There are advantages to using sites like Elance. The business model for these kinds of bidding marketplaces is that payments are retained until a project is completed. This model alleviates some worries about getting paid, especially when working from a remote location. On these sites, a percentage of the payment is taken and there may be additional charges that vary. This can be quite costly to a freelancer who may already be working at lower than desired wages.
From a company’s perspective, it may seem like winning the lottery to find a designer to create your logo for 20$. But, you usually end up getting what you pay for. You should also consider and be sure that the logo you end up with is really original. When you’re paying someone 20$ can you ask them to sign documents pertaining to originality? Will they be accountable? You don’t want to get sued down the road. So the 20$ logo now ends up costing thousands in legal fees.
At workhoppers.com we did an experiment and gave one of these auction “dollar store” marketplaces a try. We were able to purchase a blog article for a fixed rate of 10$. But the article was less than desired and we ended up spending hours of our own time fixing it up. In the end there were no savings. The old saying held true for us “pay peanuts, get monkeys”.
Some tips:If you are a freelancer, don’t sell yourself short. You have choices on how you want to sell your skills. You can create your own website and market yourself independently. This may, however, be time consuming and not where you want to be spending your hours. If that is the case, think carefully about what sites you decide to work with and get all the facts. Consider what commissions or fees you need to pay. Find out as much as you can about the project and the company before bidding by looking at their history. Choose a site that allows you to compete locally.
Companies are often willing to pay more for the advantage of working with someone face to face. As a company, try to find people in your own community to work with, meet them face to face and together find a way that works best for both of you. There are so many advantages to working with someone close by. See blog “Smiley Face or Face to Face Interaction in Business” .
At workhoppers.com we are working towards overcoming the frustrations and difficulties found in the on line talent market place. We have developed a business model that satisfies the needs of both the freelancers and companies hiring. Buy and sell skills today at www.workhoppers.com