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Upwork removing 5% commission bracket and moving everyone to 10% bracket

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Re: Upwork removing 5% commission bracket and moving everyone to 10% bracket

#11

Post by benjaminwootton »

msadowski wrote: post #6

Wow, I thought they would honor the 5% charge till the end of the contracts but it seems they will go to 10% by the end of the year. Since Upwork theoretically locks you in for 2 years with a client, I’m expecting there will be a small exodus of people with long-term projects . I’d much rather sort out invoicing myself and get paid through Stripe than lose out on extra 5%.

The main value add of Upwork for freelancers is helping them to find work in the marketplace.

If you can find and bill directly, of course that may be preferable, but finding clients is hard and the business development also has a cost.

Re: Upwork removing 5% commission bracket and moving everyone to 10% bracket

#12

Post by aerhardt »

MrThoughtful wrote: post #4

I have been using Upwork for years to outsource tasks. I'm still not sure what to think of them. On the one hand, I keep coming back because I usually find the better freelancers on Upwork than elsewhere. On the other hand, paying them 10% means a freelancer who works for me for two weeks works one whole day just to pay the Upwork fee. And there are other fees on top of that. Upwork's overall take rate is over 15%. A…

My experiences have been similar. Very happy with the talent and confident that I could get good people there at any time. At the same time, I'm quite ambivalent about their UX (the invoice issue you mention is really bad) and the fees. I feel it's prime for disruption.

The platform has a lot of features, including complex ones in the area of payments. But I think a challenger should be able to build something with fewer resources and take, say, ~7% instead of 15%. Being an old incumbent, Upwork probably carry a lot of cruft around.

Of course building a marketplace is very hard (dual marketing problem, etc.) but I don't think it'd be that hard to build a new one. As a buyer at least I'm not that locked in, I have also tried other platforms (ex: a European one called Malt) with great success, and I often shop around between platforms if I can.

Re: Upwork removing 5% commission bracket and moving everyone to 10% bracket

#13

Post by benjaminwootton »

MrThoughtful wrote: post #4

I have been using Upwork for years to outsource tasks. I'm still not sure what to think of them. On the one hand, I keep coming back because I usually find the better freelancers on Upwork than elsewhere. On the other hand, paying them 10% means a freelancer who works for me for two weeks works one whole day just to pay the Upwork fee. And there are other fees on top of that. Upwork's overall take rate is over 15%. A…

In the UK, if you work through a recruitment agent then they will be taking 10-20% of your rate as a margin.

If you work through a consultancy that could be as high 30-50%.

If you do your own business development then that is hard work, risky and also expensive. It would take much more than 10% of your time.

Though freelancing can be a tough gig, I don’t think Upworks rates are unreasonable considering they have a marketplace of work requiring very minimal biz dev and various financial protections to make sure you get paid.

All of these rates just gets loaded into the rates the clients pay anyway so it’s a wash to a certain extent.

Re: Upwork removing 5% commission bracket and moving everyone to 10% bracket

#14

Post by desaiguddu »

sph wrote: post #5

Meh, that's a dishonest title. Yes, Upwork are moving everybody on the 10% fee. But they previously had a progressive fee: * 20% fee for the first $500 earned from a client * 10% fee between $500 and $10,000 earned * 5% fee after the first $10,000 earned Those figures are per client. Start a new job with someone else, you start from the lower bracket again. So they were basically living off short term contracts and l…

IMHO, most of the Upwork jobs are upwards of $1000 if it's a serious client.

A large number of freelancers & agencies have built a stable clients on Upwork from years together. It will be a little revenue shock for them. Or eventually clients will pay more to cover the costs.

Let's assume you are a freelancer with a client relationship of 40k

* 20% fee for the first $500 earned from a client - $100

* 10% fee between $500 and $10,000 earned - $ 950

* 5% fee after the first $10,000 earned - $ 1500

New model - 40k

Am I missing anything here?

* 10% fee of any amount - $ 4000

Re: Upwork removing 5% commission bracket and moving everyone to 10% bracket

#15

Post by whitemary »

sph wrote: post #5

Meh, that's a dishonest title. Yes, Upwork are moving everybody on the 10% fee. But they previously had a progressive fee: * 20% fee for the first $500 earned from a client * 10% fee between $500 and $10,000 earned * 5% fee after the first $10,000 earned Those figures are per client. Start a new job with someone else, you start from the lower bracket again. So they were basically living off short term contracts and l…

[flagged]

Re: Upwork removing 5% commission bracket and moving everyone to 10% bracket

#16

Post by aerhardt »

benjaminwootton wrote: post #13
MrThoughtful wrote: post #4

I have been using Upwork for years to outsource tasks. I'm still not sure what to think of them. On the one hand, I keep coming back because I usually find the better freelancers on Upwork than elsewhere. On the other hand, paying them 10% means a freelancer who works for me for two weeks works one whole day just to pay the Upwork fee. And there are other fees on top of that. Upwork's overall take rate is over 15%. A…

In the UK, if you work through a recruitment agent then they will be taking 10-20% of your rate as a margin. If you work through a consultancy that could be as high 30-50%. If you do your own business development then that is hard work, risky and also expensive. It would take much more than 10% of your time. Though freelancing can be a tough gig, I don’t think Upworks rates are unreasonable considering they have a ma…

> In the UK, if you work through a recruitment agent then they will be taking 10-20% of your rate as a margin.

I would still expect a pure software marketplace to be significantly cheaper than a recruitment agency, given economies of scale and other efficiency gains.

Re: Upwork removing 5% commission bracket and moving everyone to 10% bracket

#17

Post by msadowski »

MrThoughtful wrote: post #4

I have been using Upwork for years to outsource tasks. I'm still not sure what to think of them. On the one hand, I keep coming back because I usually find the better freelancers on Upwork than elsewhere. On the other hand, paying them 10% means a freelancer who works for me for two weeks works one whole day just to pay the Upwork fee. And there are other fees on top of that. Upwork's overall take rate is over 15%. A…

The 12 pdfs are equally annoying to freelancers.

I think what hurts here are how the fees are structured. If I charge client $100, the invoice will show this number. This will also be the income I’ll be reporting to tax authorities, so I have to pay income tax on $100, and an Upwork fee will be automatically deducted. I don’t know if they would have a legal way to do this but I would much rather my invoice showed $90 in this case since I never even had the chance to see the full $100.

Re: Upwork removing 5% commission bracket and moving everyone to 10% bracket

#18

Post by muzani »

sph wrote: post #5

Meh, that's a dishonest title. Yes, Upwork are moving everybody on the 10% fee. But they previously had a progressive fee: * 20% fee for the first $500 earned from a client * 10% fee between $500 and $10,000 earned * 5% fee after the first $10,000 earned Those figures are per client. Start a new job with someone else, you start from the lower bracket again. So they were basically living off short term contracts and l…

The problem with the new pricing is that matchmaking value drops the longer a contract goes on. Once the relationship and trust is established, they can go around Upwork for 0%.

Re: Upwork removing 5% commission bracket and moving everyone to 10% bracket

#19

Post by gamblor956 »

msadowski wrote: post #17
MrThoughtful wrote: post #4

I have been using Upwork for years to outsource tasks. I'm still not sure what to think of them. On the one hand, I keep coming back because I usually find the better freelancers on Upwork than elsewhere. On the other hand, paying them 10% means a freelancer who works for me for two weeks works one whole day just to pay the Upwork fee. And there are other fees on top of that. Upwork's overall take rate is over 15%. A…

The 12 pdfs are equally annoying to freelancers. I think what hurts here are how the fees are structured. If I charge client $100, the invoice will show this number. This will also be the income I’ll be reporting to tax authorities, so I have to pay income tax on $100, and an Upwork fee will be automatically deducted. I don’t know if they would have a legal way to do this but I would much rather my invoice showed $90…

The Upwork fee is reported as a business deduction on your tax return. As an independent contractor you pay income taxes based on your self-employment net income (not your gross income, as employees are) because you are effectively treated as a type of business for income tax purposes.

Re: Upwork removing 5% commission bracket and moving everyone to 10% bracket

#20

Post by nnurmanov »

sph wrote: post #5

Meh, that's a dishonest title. Yes, Upwork are moving everybody on the 10% fee. But they previously had a progressive fee: * 20% fee for the first $500 earned from a client * 10% fee between $500 and $10,000 earned * 5% fee after the first $10,000 earned Those figures are per client. Start a new job with someone else, you start from the lower bracket again. So they were basically living off short term contracts and l…

I could not find a ClickHouse expert for some project, not sure where to look such people
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