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Table Of Contents  The Online Freelancing Guide
 >  An Analysis and Review of Popular Online Freelancing Marketplace Sites

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vWorker - Freelancer Community Characteristics
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Report Card for the Big Five Online Freelance Marketplace Sites
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Cost Comparison for the Big Five Online Freelance Marketplace Sites
(Page 4 of 5)

Costs Computed

For each of the scenarios, I computed costs in these areas:

  • Membership and Category Fees: These are fixed costs that are charged each month regardless of volume.

  • Bidding and Premium Placement Fees: This extra cost is only applicable to Elance, at least at the bidding rates I’ve assumed in my current scenarios.

  • Transaction Fees: These are the transaction fees for work performed, computed using each site’s stated percentages. For Guru, I assumed all funds were deposited via credit card, incurring the extra 3% fee on top of its nominal 5% or 10%. For Elance, I used 8.75% in all scenarios, except for 6.75% for 10% of the work done in the high volume “Advanced” scenario (again, an arbitrary choice). For vWorker, I used 15% for all bid work and 12.5% for repeat work.

  • Other Fees: At the present time, this is just the fees associated with making withdrawals.

  • Escrow Fees, Arbitration Fees or Losses Due to Uncollectible Revenues: This includes costs for using escrow services or arbitration, and in the absence of either, the approximate cost associated with losing payment for work performed.

The final item in that list deserves more explanation in terms of how it applies to the various sites:

  • vWorker: This amount is zero, since that site has an excellent arbitration system included for free.

  • Guru: This value is 2% of the monthly volume on the site for the scenario, since that’s what they charge for escrow.

  • Freelancer.com: Here, I used the site’s $10 flat minimum cost for arbitration applied to the average number of disputed projects.

  • Elance: For Elance I similarly figured out how many projects were likely to go into dispute and then charged $99 for each one, except in the Advanced category, where I used a weighted average assuming 80% small projects ($99 arbitration fee) and 20% larger projects ($199 arbitration fee). (If anything, I am being somewhat generous to Elance here, as in practice many people just “eat” unpaid projects rather than going through a third party arbitration process.)

  • oDesk: In this case, the final cost line is equal to 5% of the monthly billing volume for the site. oDesk has no escrow or arbitration service for flat rate work, so any work a client refuses to pay for is lost.

I realize that this is probably the most controversial of the my choices in this model, but as I see it, these are real, hidden costs that need to be taken into account for a comparison to be fair. If anything, the 5% figure is arguably conservative.


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vWorker - Freelancer Community Characteristics
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Report Card for the Big Five Online Freelance Marketplace Sites
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