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Fees Represent an Incentive System
The reason why sites differ so much in terms of which fees they charge is that they use them as an incentive system to influence who uses the site, and how they behave. If you’ve ever heard someone complain about politicians using the tax code for “social engineering”, that is exactly what happens here.
For example, membership fees are often used not just for the revenue they generate, but because the site’s owners believe this will lead to a higher class of freelancer community. The logic is sound; people who are just “kicking the tires” will think twice about paying, say $20 a month, just to be a member of a site. In contrast, most professional freelancers will not.
Another good example is bidding fees, which are used by some sites both to raise money and to limit the number of proposals that are placed on projects. Again, this is common sense: if it costs money to place a bid, freelancers will be more choosy in whom they send proposals. Sites believe that reducing the number of proposals in this way makes it easier for clients to find good matches for their projects (which is debatable, but that’s a subject for another time.)
It’s important to remember that a site that is less expensive to use is not necessarily better than one that is pricier. You must look at the big picture, and remember the ultimate goal, which is making money and advancing your freelance career. You are here to maximize your net revenues, not just save on expenses.
A site could be free, but because it is free, have hundreds of people flooding its clients with poor quality proposals because it costs them nothing to do so. The client may be so overwhelmed that your proposal will never even be read. In contrast, a marketplace that has many fees may well earn what you pay them if you get a steady supply of quality projects from that site. All that matters is how much net money you make, and if you can get more net money in your pocket by paying more fees, you’re better off doing so.
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The Online Freelancing Guide (http://www.FreelancingGuide.net)
Last Site Update: October 21, 2011
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