Freelance Broker Sites: A Genuine Source of Clients for Successful Freelancers?

Freelancing seems to be going from strength to strength.

In 2011, the Financial Times (UK) reported a 12% growth in the number of freelancers from 2008. The fear (and often the reality) of unemployment is encouraging many professionals to strike out on their own.

And why not? Freelancing is a potentially lucrative and highly enjoyable way to make a living. According to the 2012 Freelance Industry Report, 90% of freelancers are happier now than they were before going solo and nearly half have felt no impact from the economic downturn. Furthermore, 77% of freelancers were optimistic about their business prospects over the following 12 months.

This explosion in the popularity of freelancing has led in part to the rapid growth of freelance broker sites. For instance, Elance has enjoyed consistent growth since its inception, with the number of jobs posted rising from around 200,000 in the first quarter of 2012 to 300,000 in the same period in 2013.

However, many freelancers turn their noses up at freelance broker sites. In fact, in the past I could certainly have put myself in that category — I have never used the likes of Elance to find clients for my freelance blogging business.

But have I been shortsighted? Has my instinctive disdain for freelance broker sites masked their potential? In this post I intend to reveal the answers to those questions.

The Reputation of Freelance Broker Sites

There is no doubting the popularity of freelance broker sites — the likes of Elance, oDesk and People Per Hour. One logical argument in their favor would be that their success must indicate the success of freelancers using those sites. Freelancers operating on Elance earned $200,000,000 in 2012 alone — there’s clearly a lot of money circulating through the system.

However, it doesn’t take much digging to find a considerable amount of negative feedback from American freelancers. One particularly compelling article argued that it should be a case of sit vendit cavete (seller beware) as opposed to the traditional caveat emptor when it comes to operating on Elance. The article’s author, Mary Rose Maguire, painted an unflattering picture of (a) the experience of seeking work on Elance and (b) the way in which Elance chooses to treat its freelancers.

She shared a story of one experience she had in which she paid to bid on a project that quoted an estimated $40-$50 hourly rate. The job was eventually awarded to someone who quoted just $10 per hour and so Maguire requested that Elance refund her payment on the basis that she would never have submitted a bid had she known that the client would choose a $10 per hour contractor. Elance originally said no to her request, only to reverse their decision upon the publication of her article.

One of the most compelling arguments against freelance broker sites is that they are a market driven by price. Freelancers often end up duking it out with their competitors on the basis of who can offer the cheapest service, not necessarily who can provide the best service. If you are a freelancer who does not need additional clients, why would you want to put yourself in a position where you are scrapping for relatively low-paid jobs?

However, it’s not all bad publicity out there. Allena Tapia, the About.com expert on freelance writing who considers freelance broker sites “Ebay for services,” has had positive experiences with the likes of Elance:

I’ve encountered many people who have no interest in using them, and hold that the wages are awful. On the other hand, my personal experience with them has been positive. I never dip below my set fee structure, and still usually find one or two projects a month who are willing to pay what I ask.

Tapia went on to endorse freelance broker sites on the basis of speed of turnaround:

One thing that seems to draw me to them is how quickly I can pick up work to fill out my schedule. Often, when a writer applies for freelance jobs through freelance writing job lists and other resources, you wait weeks or even a month or two for a project to begin. Bid sites generally feature quck [sic] turnaround.

One could continue to search the web indefinitely and encounter similar stories — both positive and negative. So if freelancer broker sites split opinion so dramatically, how can we determine whether or not they serve as a good marketplace for sourcing quality freelance work?

Examples of Freelance Broker Site Success

Given that freelance broker sites generate so much revenue, the logical conclusion is that someone must be doing well out of them. And that is of course the case — you don’t have to look far to come across success stories.

The first one I would turn to is that of Sophie Lizard — a freelance blogger who I have known for many months. She started out on People Per Hour back in 2009 and now commands a healthy rate of £50 ($75) per hour. Although her client base now spreads beyond People Per Hour, it was the catalyst that launched her freelancing career and she still obtains work from it.

Looking beyond that, I had the chance to speak with Rich Pearson — the Chief Marketing Officer of Elance — recently. He was happy to share with me some Elance success stories, such as that of Corrina (a project manager):

Freelancing on Elance has given me a family life, allowing me to work for Fortune 500 companies and still spend time at home. It’s changed my family life.

While Pearson was happy to point out that the average rate for freelancers on Elance can often be modest (between $15 and $30 seems to be the average), he also argued that many people can (and do) earn a great deal more than that. If you’ve got people earning $3 on one end of the spectrum, logic dictates that others must be earning far more than the average. In fact, Pearson revealed that his wife is a freelancer and uses Elance herself, albeit in an assistive role alongside her other client sources.

Should Successful Freelancers Use Broker Sites?

And therein lies the potential answer as to how successful freelancers can use broker sites — to augment their income rather than acting as the key driver of their earnings.

This is a pattern that seems to be repeated in many of the positive stories regarding freelance broker sites. Everyone from Allena Tapia, to Sophie Lizard and even Rich Pearson’s wife all consider these sites as another string to their bow — a marketplace where they can expect to land a small handful of jobs per month that pay a worthwhile price.

This was an approach that Pearson himself argued in favor of. He pointed out that Elance has powerful filters that can enable you to browse through only the most lucrative and worthwhile contracts. The implication was clear: Elance doesn’t have to be your business, but it certainly can be part of it.

What Do You Think?

Ultimately I think the likes of Elance and co. are what you make of them.

They are certainly marketplaces in which one can go out and get work done for absurdly low amounts from contractors in third world countries. However, it has been proven that you can land relatively lucrative jobs if you are prepared to be selective and patient. It seems that they can be all things to all people.

But what do you think? Have you ever used a freelance broker site and if so, do you endorse them? Do you have an opinion even if you haven’t used them before? Let us know in the comments section!

About Tom Ewer


Tom Ewer and the WordCandy team have clocked some serious mileage as freelancers, agency employees and even agency owners over the years, and they love sharing their combined expertise here on the Bidsketch blog.

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Mary Rose Maguire

Hi, Tom. Nicely written article! You did a great job in showing both the pros and cons of freelance job boards. I also appreciated the mention.

My blog’s review of Elance has clearly been the most popular post I’ve ever written. I continue to be fascinated with other freelancers’ stories about their own experience. I will agree there are good points and not-so-good points about using a freelance job site.

Last year, as I launched my own freelance copywriting business, I had a client from a referral and then used freelance job boards like oDesk and Elance to augment my project roster, just as you wisely stated. I may do a follow-up post referring to your article and also explain how a freelance job board can be helpful.

Participating in these boards helped a “newbie” like me to learn the ropes regarding client relationships. That’s pretty huge. Learning how to properly vet a client, craft a decent creative brief and continue to work with him regarding deliverables takes time and some finesse. Some clients know exactly what they want but many do not. A freelance job board can give a quick “baptism by fire” experience that is well worth the ups and downs of the bidding wars.

That said, my main issue was and still is the rate a client posts for a project. If we were talking about a store advertising an in-demand product for a low rate and then once the consumer arrived, discovered the product was actually priced higher — we’d call that the “bait and switch” and that store could potentially get into a lot of trouble.

If a client wants to only pay someone $10 an hour, of course that’s their right. But how can the system also be fair to the contractor who bids for a job they feel will be awarded for the posted amount of between $40 – $50? That’s the crux of the problem, at least from the freelancer’s position.

Since I’ve first signed up for these boards last year, I’ve increased my hourly rate by 100%. When I receive an invite, I immediately check the client’s history to see how much they’ve paid for past projects. Anyone who isn’t paying contractor’s at least $20 per hour receive a “declined” message from me. And I stick to my hourly rate (which is much more than $20 per hour).

Within Elance, a client can choose to hide their payout history. This is problematic for the potential contractor who then has to decide if they want to risk bidding for the project. In my case, Elance told me that it was my responsibility to check the client’s history but I told them I did, the client just happened to have hidden it.

I have had a few repeat clients with these boards. It’s a good way to fill in the gaps when I’m between more lucrative projects. But I still feel as though the freelancer is a bit unprotected with the bidding process. Interestingly enough, the client who had accepted the contractor at $10 an hour also gave this same contractor a review of the completed project on the same day. This also struck me as odd since very rarely does a writer accept a project and finish it on the same day. (And on a Sunday, yet!)

Finally, in my comment area are a few freelancer stories of being shut down by Elance. I’ve also heard a similar story from one of my copywriting message boards. According to these freelancers, they were making good money and had a steady stream of clients when suddenly Elance closed their account. You’d think Elance would like getting the commissions from their projects but apparently not. Those stories puzzled me.

Bottom line: if you’re a freelancer, you can get decent project work from these boards but it takes sifting through all the low-paid projects to get it. Many clients simply don’t know what they want and it’s up to you to ask the right questions to determine if it will be a good fit. I wish everyone the best of luck as they pursue it. Forewarned is forearmed. 🙂

Nikki

I’m pleased you covered this subject. I’ve had some moderate success on PHP in the last 12 months although I’ve also been knocked for £500!

I set up profiles all over the place but maybe wasn’t active enough in bidding for work to do well out of the job boards. I learned about PHP’s hourlie feature (you pledge to produce a product for a set fee) about a year ago and have sold dozens of infographic designs since for my set fee of £25ph. I’ve worked on some really great projects with some smart marketing experts.

You can have your infographic designed for literally a 10th of what I charge but there’re also serious buyers looking for quality and have budgeted accordingly.

My advice is to give it a try, don’t be scared to negotiate, politely decline if your minimum hourly rate can’t be met and if a client explains the only way to do is business is out of the broker site be very careful!

Emily Journey

Thanks, Tom! The timing of this article is perfect for me. I decided to give Elance a shot as someone who hires and in the past 30 days, I have hired 5 different Elancers for writing and graphic design jobs. I basically jumped in the pool rather than dip my toe to test the water with Elance. I paid an average of $45-$50 for 700 word articles. The Elancers produced content at the quality level I expected based upon their portfolios. So, no surprises. Only one article was actually spectacular. I’m glad I did it and I will definitely use Elance again!
Interestingly, there were several high end Elancers who declined my personal invitations to submit a proposal! And, this was with no particular budget limit. I’m theorizing that they were just too busy or did not like the job I presented. From my end, I could see there were definitely Elancers doing quite well. (You can see the actual earnings YTD of Elancers.) After all, it is a rare person who has the ability to decline work.
With all that said, I’ve considered signing up as an Elancer myself. I’m going to read Mary Rose Maguire’s article before deciding.

Coral

When I was only 2 years into my Graphic Design career, I had taken a shot at doing the freelance brokering sites before. I hated them! All the people with beautiful portfoilios were getting all the work, and since I’d only had a couple years experience, my portfolio was far from beautiful… or even full, for that matter. I quickly gave up wasting my time bidding on projects. About 6 years into my career, I had come across a new freelance site which let’s the client state the cost of the project, eliminating the bidding war. This was very nice because I no longer had to compete with people who were bidding at hourly rates I wouldn’t think about doing. It was also really great because the site itself set certain cost parameters for each job. For instance, if you wanted a logo done, it would not let you set the award for any lower than $500. This really protected the freelancer’s interests, so I decided to check it out. The downside is that you have to submit your work as if in a contest and the client chooses 1 or more winning designs whom they pay, and every else gets diddly-squat. After working on 3-4 projects for several hours each, and not getting paid a dime, I determined I was DONE was freelancing sites–another waste of time. Fast forward to 2 years ago (13 years into my career): I had been laid off from my printshop job, all the interviews I was going on were offering $10 per hour when my last 2 jobs paid me $25 per hour. I decided to start freelancing exclusively. At first, I only sought work from friends, family and former clients, but I quickly realized that was going to get me nowhere. I’m a horrible salesperson and can’t, for the life of me, secure any new leads, sales, or otherwise. Out of desperation, I turned back to freelancing sites with the mindset that “If I’m sitting here doing nothing anyway, I might as well be designing something that could potentially get me money”. So I went back to the non-bidding site. I use my time very carefully. I will only submit work when my regular clients are “quiet” and I’ve already finished all of my current projects. I only submit work if it sounds like it’s within my capabilities of being the BEST. I look at the other submissions and try to determine if I can do it better. I work in order from what I know I can do really well, to what I think I’m really bad at, and I never spend more than a couple hours on each submission. There are some months where I don’t make a thing, but there are other months where I make $900 for doing 5 hours of work! Not to mention that some of the clients on that site have contacted me for offline work as well–so, I’ve actually made new clients this way as well. In short, my experience in the field and understanding of my skills and abilities over the years has finally helped me to use sites like this to my benefit. I used to look down upon them, but now I look toward them for help when I need it.

Angela

Having been on both side of the spectrum (buyer and provider) in the past, I would say those website are a general waste of time.

As a buyer, I’ve been ripped off many a time. I can deal with late projects (depending how late it is) but what I can’t understand is why they don’t finish the project and demand for more money. Or, they say they have experience in something but it clearly seems that after hiring them that they have no idea what they are doing.

From the seller perspective, it’s good to get some jobs and potential testimonials under your belt for your portfolio. Also, if you live in a country where USD$1 is a lot of money, it’s fantastic. But in the end it is best that you move on elsewhere.

Julian Kingman

Interesting comment, Coral, I’ve been staying away from ‘competition’ sites, but maybe it’s time to re-evaluate.

Thanks for the article, Tom, I had sort of abandoned elance and odesk as a price competition, but keeping up to date there may not hurt me after all.

Aaron Peterson

“quck [sic] turnaround” — Ruthless…come on.

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