May 4, 2016 at 01:08Upwork changes the amount of commission
Hello. If you work with clients through Upwork (formerly the exchange was called oDesk), you should definitely be aware of future changes in service commissions. There is currently a fixed commission rate of 10%. However, from June 2016, it will begin to vary from 5% to 20%. Those freelancers who engage in small and inexpensive projects, not working with the same client more than once, will now pay not 10% of earnings, but 20%.
In short, the interest rate will be as follows: if prior to receiving the money from the client, his past payments in your favor did not reach the threshold of $ 500, you will be deducted 20% of the money received. When the threshold of $ 500 is reached, the commission is reduced to 10%. And finally, if the payment threshold has reached $ 10,000, the commission is reduced to 5%.
The creators of the service explain their decision by the fact that cheap contracts cost Upwork more expensive in terms of maintenance. As they put it, the search for new customers who will offer you a small contract on the service site takes up some resources. On the other hand, repeated contracts with the same client no longer require Upwork to spend a lot of time looking for and providing you with new customers.
Upwork, according to the creators, is now striving for more long-term contracts to appear within the service. The longer you work with a client, the more payments you receive from him, the more you will eventually earn. You’ll see this picture, approximately, from June, if you submit an application for some hourly project:
Customers will now also pay
Not only freelancers will feel all the advantages of new changes. Along with the introduction of the floating commission, a fixed commission for customers appears. Now, any transfers within the service will be additionally
Freelancer reviews
Judging by the reviews of freelancers (see the link "Post on the community.upwork.com forum"), this innovation (like most of the "innovations" Upwork, however) was not very well received. I will give a few examples:
Signe J: This change punishes freelancers, like myself, who offer one-off services. I write resumes for clients. If I do my job well, they don’t need to come back and have me write another resume because they've successfully used the document I created to find a new job. This new fee structure punishes me for a job well done. There isn't anything on earth I can do to stretch a resume job into a $ 500 or $ 10,000 + job. Not a single thing in the world.
This change will hurt freelancers like me - those who do one-time work for one client. I am writing a resume for people. If I do it well, clients will not come back to me for new resumes because they successfully find work using it and they no longer need it. The new approach to charging commissions punishes me with a larger commission for doing my job well. I can not find a single reason why I could set the price for writing a resume at 500 or 10,000 dollars to reduce the commission. None.
Ela K: The latest changes have made me realize just how much I need to push my business outside of Upwork. 'Make your clients rehire you again and again' is just like 'make them end contracts and leave (good) feedback'.
Extreme changes helped me realize how much I want to take my work away from Upwork. “Making your customers hire you again and again” is the same as “getting them to close the contact and write a [excellent] review.”
Yolanda G: I was not agree with the past changes such as "connects", the VAT feature, and even the 10% was a huge effort for us all. Clients don't want to pay high prices, most of the works taken are below $ 500. UpWork may not be able to stand this feature, but we the freelancers, the hard workers, are absolutely disagree. We work very hard for UpWork, they limit us the connects, force us to add our VAT, and now they want a 20% from our work? No, I am not agree at all.
I did not agree with such extreme changes as “connects”, VAT, and even 10% of the commission - it was a big load on all of us. Customers do not want to pay a lot of money; a very large part of the work is paid below 500 dollars. Upwork may not be tempted to raise commissions, but we - freelancers, hardworking workers - generally disagree with this. We work a lot for Upwork, and they limit us to “connections”, make us pay VAT, and now they want to take 20% of our earnings? No, I don’t agree at all.
Michael B: Even those who have long term high earning relationships need to replenish clients and renew their client base ... for which they are penalized with a 20% charge. Here's how it works in reality:
PREVIOUS:
Freelancer gross earning $ 100
Service fee $ 10
VAT $ 2
Net = $ 88
NEW:
Freelancer gross earning $ 100
Service fee $ 20
VAT = $ 4
Net = $ 76
$ 12 reduction on $ 88 = 13.6% cut in earnings
Even those who have been working with the same client for a long time, you need to periodically look for new ones to replenish their customer base ... and for this they will now be punished with a 20 percent commission. See how it works in reality:
BEFORE: I
earned $ 100 I
paid a commission - $ 10 I
paid VAT - $ 2
I got on hand $ 88
NOW: I
earned $ 100 I
paid a commission - $ 20 I
paid VAT - $ 4
I got on hand $ 76 I
get a reduction income by 13.6%.