5 Reasons Not to Use Websites Like Upwork
Today, there are several different freelancing sites created to help pair freelancers with companies. Freelancing sites include but aren’t limited to: Upwork, Fiverr, Toptal, Freelancer and more. I personally have only experienced working on Upwork and wanted to share my thoughts and experience with the platform. Sites like Upwork are a double-edged sword in that they provide opportunities for freelancers to find new work, but they come with caveats that freelancers don’t have to worry about when working with clients they find outside of the platforms. This article focuses on the negative aspects of using sites like Upwork. If you’re more interested in reading reasons why these sites can be helpful, check out my article titled “5 reasons to use websites like Upwork.”
There are a lot of reasons to avoid using websites like Upwork. They place restrictions on how you interact with clients and are riddled with all kinds of problems that can make your experience using their platform frustrating. I personally feel that these kinds of websites are not built to cater to freelancers, but instead to businesses. All advertisements I’ve seen for Upwork and Fiverr have been focused on bringing businesses to their platform, not freelancers. In addition, the rules that freelancers have to abide by are restricting. The following list is a few of the reasons why it may be good to avoid using websites like Upwork. Although most of the reasons listed below are specific to Upwork, some reasons apply to the other freelance platforms as well.
5. Applying for Projects Isn’t Free
This may be an issue specific to Upwork, but one of the pains of this platform is that if you want to apply for a project that’s been posted, you have to pay Upwork a small fee to submit an application. Upwork uses a feature called “connects” for freelancers to apply for projects. Each connect costs $0.15 and project proposals can require anywhere between 1-6 connects to apply. Whether a project proposal will require more or less connects depends on what kind of project freelancers apply to. If a project is only going to take a day to finish and has a small budget, Upwork charges fewer connects. Projects that require a longer commitment from freelancers and have larger budgets need more connects. If you run out of connects, you are ineligible to apply for project postings (unless a client invites you to interview) until you purchase more connects. Upwork didn’t used to require freelancers to pay for each project they apply for, but an update to the platform in 2019 changed all of that. Although $0.15/connect isn’t much, it creates an unnecessary expense for freelancers who aren’t guaranteed the projects they’re submitting applications for. In fact, I’ve found that most of the projects I apply to using the Upwork search filter don’t work out. Project conversion rates are much higher when clients are the ones reaching out to freelancers to interview for work. Having to pay to apply for projects in addition to giving Upwork huge commissions on income earned through their platform just feels too greedy.
4. Scams are Everywhere
Because just about anyone can create business profiles on platforms like Upwork, many con-artists use the opportunity to pose as legitimate businesses to scam freelancers. A lot of new freelancers to the platform often run into fake project postings and fake clients looking to take advantage of them. Upwork and other freelance websites do their best to locate scam accounts and delete them, but several scams still leak through. As such, it’s important to use caution when interacting with new clients on these platforms.
Pro Tip: Most scams try to get you off of the freelancing platform you’re using by inviting you to a google hangouts meeting. If you see a client trying to pay you or communicate with you outside of the platform, it’s best to avoid it and report it. Be careful about what information you give to people you interact with through Upwork.
3. Terms of Service are Restricting
Although freelance websites provide opportunities for freelancers to meet new companies and earn more income, there are several limitations put in place that prohibit freelancers from working with clients outside of their platforms. For example, Upwork requires freelancers to only communicate and perform transactions through their site for the first 2 years that you work with them. For those 2 years, freelancers are required to receive payments from clients through Upwork, with Upwork taking a percentage of every invoice paid to the freelancer (and also taking an additional 3% from the businesses on every transaction). After the 2 year agreement is up, freelancers and clients are free to interact how they choose. But 2 years is a long time for independent freelancers, and most clients freelancers work with on Upwork are one-time projects. Upwork has an article on their blog that mentions some of the main points from their terms of service all freelancers should be aware of.
2. Good Clients are Few and Far Between
Most companies who go on freelancing websites do so to find cheap labor. A lot of businesses don’t care about having the highest quality product, just something that will get the project done for the cheapest price. Because Upwork consists of workers throughout the world, freelancers in less expensive countries can easily outbid those living in more expensive countries. When a business is only focusing on price to choose their freelancer, they’re less motivated to hire those who need to charge more to afford living in more expensive locations. Good clients on Upwork are hard to come by. You have to spend a lot of time sifting through countless postings of people looking for cheap work before you come across a business with a healthy budget that’s looking to hire skilled workers.
1. Takes a Large Cut of Final Payment
One of the biggest reasons not to use freelance websites is how much it costs to use the platforms. You might be thinking, “Isn’t it free to join Upwork and Fiverr?” and if so, you’re correct. Freelancers often don’t have to pay fees to access these platforms. However, they do pay an expensive commission for any income they make through the platform. When freelancers sign on with a new client, Upwork takes a 20% cut of the first $500 paid to the freelancer. After that, the commission rate drops to 10% until freelancers make $10,000 with a single client. After the $10,000 milestone is reached, Upwork drops the rate down to 5% indefinitely. The commission percentages reset for every new client that freelancers work with on Upwork. This means that it doesn’t matter if you make $50 or $500,000 through the platform, you have to start at a 20% commission rate for every new client you work with. And because most clients on Upwork are looking for someone cheap to do a one-time project for them, it’s rare that freelancers ever see a 5% commission rate, or even a 10% commission rate. When you find clients outside of freelance websites, you get to hold onto every dollar you earn for the projects you work on. There’s no need to worry about paying anyone commission or abiding by limitations set by a Terms of Service Agreement
Bonus Reason:
Customer service tends to be awful on freelance websites. I’ve been fortunate not to need help from Upwork’s customer service, but I’ve read some nightmare stories about bad experiences. Be cautious with who you work with on these sites and make sure you do a good project communicating to help reduce the number of bad experiences you run into.
As convenient as Upwork and other freelancing sites are for making extra income, they do come with a hefty price and a few headaches. I like to use Upwork as a back-up source of income rather than my primary source of income. Doing so forces me to be more creative in how I network, and has helped me discover new methods of finding clients that are more concerned about the quality of my work than the price.
TLDR: Although freelancer websites can be helpful for finding work, there are some negatives to using platforms like Upwork. 5 reasons to avoid sites like Upwork, include: applying for projects isn’t free, scams are everywhere, terms of service are restricting, good clients are few and far between, and the platform takes a large cut of your payments.