Fridays with Vicky 75
There’s been a lot of talk about the new pricing structure that Upwork is launching here in June. UpWork, an online community that connects clients with freelancers, has stirred the pot with the new changes.
“Greedy” and “abuse of power” are just two things I’ve seen in the Upwork chat that address the issue.
The “abuse of power” I’m sure relates to that oDesk and Elance merged a while back. oDesk then became Upwork and are now dominating the space.
With Upwork we saw changes in design and layout. We also saw changes for the freelancers having to pay to apply for more jobs. Monthly membership fees were installed and now this… the new pricing structure.
UpWork New Pricing Structure
Starting June 21 affecting both freelance workers and clients, the new pricing structure will be in place.
Freelancers
For the Freelancers, this means a sliding fee structure instead of the set 10% fee. In the past, if you got a job as a freelancer for $100 you would pay $10 in Upwork fee.
In the past $100 job would mean:
- $90 to Freelancer
- $10 to Upwork (Which is in reality 11.11% 10/90
The new sliding structure means higher fees initially for freelancers. Starting at whopping 20% for the first $500 earned with a client. This number will decrease the more the freelancer earns with the same client. The problem is that some jobs only require short term commitments and those freelancers will be stuck with a 20% fee. The purpose of the sliding fee structure is to encourage long term work. Not all jobs fit that “explanation” though.
This is the new price structure for freelancers:
- 20% for the first $500 made with a client
- 10% for the total billings between $500.01 and $10,000
- 5% for billings over $10,000
Clients
For the Clients that has been paying no fee previously now have two options.
- Pay 2.75% processing fee per transaction
- A flat fee of $25 monthly (not eligible for all countries)
For some this can be a real turn off, I see that.
What does the new Upwork pricing structure mean for a $100 job?
- Client pays: $100 + 2.75% fee = $102.25
- Freelancer receive: $100 – 20% = $80 (effective rate 25%)
- Upwork receive: $102.25 – $80 = $22.25
Upwork is making good money for providing the platform.
These new changes are making people upset, rightfully so maybe…
I use Upwork to hire my writers and for me the fee is not enough to go elsewhere… yet..
BUT
I see many freelancers being upset, comments like these are not uncommon…
20% upwork fees will force many freelancers to withdraw
They will be getting no more money out of me at all unless I am, literally, starving. Ever since merging Elance and Odesk this place has gone down hill.
People are upset!
Stephane Kasriel, CEO of Upwork, has responded in an email saying…
This is a change and people are voicing their opinions, but we’re confident that our new pricing model is the right decision for Upwork’s community overall.
What do you think?
There is a petition going on that you can sign over at change.org called:
Stop Upwork from screwing over its freelancers.
I’m sure these changes will go through no matter what. The question is, is this the first step of many of raising the fees for both freelancers and clients over at Upwork?
I guess only the future can tell.
Are you a client or freelancer at Upwork? Is Upwork Digging Their Own Grave with The New Pricing Structure?
What do you think of the Upwork changes, please let us know with a comment below
Have a productive day,
Vicky
Hi Vicky,
This is an interesting article. I have been outsourcing some aspects of my website but never got 100% satisfaction. I don’t know if it’s because I’m very strict or it’s just that I got to the wrong freelancers. I have heard that some bloggers were getting good results with outsourcing.
Do you outsource any piece of your website? Or do you recommend any particular company to work with? What I mainly look is for english native writers and professional designers.
I will keep this website bookmarked as I found some other articles that are really helpful.
Cheers,
Kevin
Hi Kevin,
For this site, I write most the content but for my other site I outsource most of the writing… I have been using Upwork to hire weekly writers for a few years now without problem. Sure it can take some time to find good writers but when I do I hirer them on a weekly basis… I have writers that stay with me for years…
I have also outsourced some design work and tech/security jobs all with Upwork.
Will see how long I stay with them, depends if they keep raising the prices…
Hope that helps Kevin,
Vicky
Something similar happened with Fiverr in that the buyers are now charged an additional fee equal to around 5% of the price they pay the freelancer, though Fiverr have always taken 20% of the fees since the beginning.
If you’re looking to earn a bit of quick money, then there’s nothing wrong with giving websites like these a spin, if only to see if the freelancing lifestyle appeals to you.
But I’m of the opinion that the business you build on these platforms isn’t truly your own until you are able to earn every penny you are paid.
This would mean actually going out there and getting clients by pitching them directly, otherwise it’s not really any different to being employed by a larger entity, which kind of defeats the purpose of being a freelancer in the first place.
Hi Ken,
Yes, you are right about Fiverr. A lot of the outsourcing companies are doing extra fees…
I don’t see anything wrong with using a platform to get clients. You still work on your own terms, deciding what, when and where…
That is freedom to me, has nothing to do with the fee you are paying.
Vicky
Hi Vicky, hope you’re doing well!
This was very interesting to read. I’ve almost had my site open for a month, and so far I’m the only one who puts content on it. I’ve thought about outsourcing to others in the future, but I’m just not there right now. Also never heard of Upwork before, so this was very helpful as far as becoming more aware of such businesses out there. Since you use Upwork to hire writers, what would you say would be the pros and cons of hiring other writers? Thanks!
Hi Austin,
Doing great thank you! Hope you are too.
Pros of outsourcing your content is mainly to free up time to be able to do other things with your website. Or to be able to submit more content than you can produce yourself. For me, English is my second language so outsourcing the content has been priority for me from the beginning… This site though I write most the content…
Cons is that it can take some time to really find the writer you are looking for. I’ve been through my fair share of writers for sure, but then you find somebody that is invaluable and they stick with you for a long time, it makes it all worth it!
Hope that helps,
Vicky
This is a great opportunity for a group of freelancers to create there own new portal and compete. This is how the world works. Upwork will dominate and even raise prices more until someone creates competition. Business 101 don’t complain do something about it.
I agree and I’ve seen multiple threads of this being discussed, will somebody take action on it? We’ll see
Vicky