oDesk - Fees
(Page 1 of 2)
When it comes to fees, oDesk has made my life as a writer simpler by making life for its clients and contractors simpler. Rather than complex and confusing fee structures that hit you from every side, oDesk really has only a single main fee, a 10% charge applied to all transactions. Aside from a few incidental charges related to funds withdrawal, that’s pretty much it. The 10% fee is quite reasonable given the lack of other costs, and the absence of confusing membership tiers, category fees and bidding charges makes the site much easier to understand than some of its competitors. oDesk combines this innovation with an inverse pay structure that causes employers to pay the fees instead of clients, to really stand out from the pack in this area. The only drawback is that because of the lack of an escrow or arbitration mechanism, freelancers who do fixed rate projects pay the equivalent of much more than 10% because of funds they lose to clients who refuse to pay them.
oDesk is the only one of the big sites to put the responsibility for paying service charges squarely on the shoulders of the client, not the contractor. At first I thought this was somewhat ironic, given that oDesk is also the site that seems to treat contractors less like independent freelancers and more like workers in a big company. However, making employers pay the transaction fee for work performed is actually consistent with oDesk’s business model. If you think about it, real freelancers expect to have costs associated with getting work, while employees expect to earn money and have expenses taken care of by their employer. So in a way, this really makes sense.
oDesk causes employers to cover the 10% transaction fee by differentiating between a contractor’s pay rate and his or her bill rate; the former is what the contractor nets, while the latter is what the employer is actually charged. When clients look at contractor profiles or project bids, oDesk only shows them the bill rate, so that’s what employers expect to pay. Most contractors fill out their profile rates and bid rates by entering the amount they want to receive; oDesk then adds 11.1% to come up with the bill rate. (The reason they add 11.1% is so that after the 10% transaction fee is applied to the total, the result comes out to the specified pay rate: 111% times 90% is roughly 100%.)
Of course, having the client paying the fees doesn’t mean that contractors necessarily make more money on oDesk than other sites. In fact, it’s often just the opposite, due to oDesk’s low-end orientation and marketing, and the huge numbers of bidders on most projects. There’s no free lunch, after all—the client doesn’t really care if he is paying $11 an hour and covering the fees, or $10 an hour and you’re paying them.
oDesk has only one type of contractor membership, and it has no fees associated with it. Simple!
oDesk does not have any fees to enable bidding in different work categories. In fact, it doesn’t have any restrictions at all related to categories: any contractor can bid on any project in any category or subcategory. This provides flexibility to contractors, but arguably increases the number of chaff bids that clients have to sift through when evaluating responses to a project listing.
Home - Table Of Contents - Contact Us
The Online Freelancing Guide (http://www.FreelancingGuide.net)
Last Site Update: October 21, 2011
© Copyright 2001-2011 Charles M. Kozierok. All Rights Reserved.
Not responsible for any loss resulting from the use of this site.