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Cost Comparison for the Big Five Online Freelance Marketplace Sites
(Page 1 of 5)
Contractors care a great deal about
the fees that online freelancing marketplaces charge—in fact, sometimes
I think they care too much. Of all of the particulars related
to these sites, fees seem to get a disproportionate share of the attention.
Yet ironically enough, it’s notoriously difficult to compare
the real total fees associated with using freelance marketplaces. People
have a tendency to focus on nominal figures such as monthly membership
costs or transaction fees, rather than considering the total cost of
using each site. And they don’t understand how the decisions they
make impact the bottom line.
Here are a few reasons why the comparisons
are so tough:
- The sites use widely divergent fee models. Some
charge for memberships while others do not; some have high transaction
fees while others have much lower transaction costs; some have
category and bidding fees; etc.
- The cost of using sites depends largely on how
they are used. Some cost more or less to use depending on choices that
you make about features such as optional memberships. Some provide
a noticeable discount (as a percentage of money earned) to users who
conduct a lot of volume on the site, while others don’t. Some cost
more for freelancers who work in multiple categories while others do
not. And so forth.
- Some sites have hidden fees that aren’t
immediately apparent unless you really dig into the details of their
terms of service.
- Sites have big differences in the services they
provide, some of which have an indirect impact on their real cost of
use. This is especially the case when it comes to escrow and dispute
resolution, where a site that is cheaper in nominal terms can cost extra
when a problem leads to a non-paying client, if those cheaper fees mean
there isn’t a proper arbitration service.
So, did I find the magic bullet that
can resolve these issues and allow a perfect comparison among freelancing
sites? Sadly, no. But I realized that even if I couldn’t eliminate
all of the variables, I could create a model that would give at least
a ballpark idea of how the sites really compare in terms of cost of use.
To create this model, I determined
with a set of assumptions for how the sites would be used, and then crafted
four scenarios that represent what I believe are somewhat typical examples
of contractors and how they might use the various sites. I then used
the assumptions and the variables associated with each scenario
to compute the monthly cost of each of the sites, allowing them to be
compared to each other.
Here’s how it works.
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Last Site Update: October 21, 2011
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