Why advanced freelancers shouldn’t use Bidding websites (Like UpWork, Freelancer.com, PeoplePerHour)
Freelance bidding websites attract a lot of freelance projects. They do this by encouraging competition and cheap prices. In this situation, nobody wins. The customer only gets what they paid for (not a lot). And the freelancer can’t grow their business beyond the platform. To win a bid, you must compete on price. To lower your price, you must perform a basic service or reduce your costs. This goes against an advanced freelancers way of thinking. If you focus on adding as much value to a customers business as possible, everybody wins.
Services that produce results aren’t basic. And can’t be done on the cheap. They can, however, be constrained by a budget. That budget determines how much can be done towards improving an area of the customers business.
Bidding sites are useful for specific jobs, ones that are repetitive or thoughtless. If you want more leads for your dry cleaning business, buying an off-the-shelf website for $500 won’t do it.
Problems for customers
It’s easy for non-technical people to assume web services are cheap as standard. And they can be, if you do not care much about the customers real goals. But cheap solutions rarely deliver any value. If your aim is to provide the most possible value, you need to embed yourself in their business. And to win on that basis, you need to be clear about why they need, as a partner rather than a cheap product or service.
High-end customers want a trusted partner that can help them reach their goals, not a tool to try to do it themselves. Unless you know exactly what you need and you can spell it out very clearly, you’re going to be left wanting.
Bidding sites do one thing very well, and that is to provide a guarantee that even if a project goes bad, the customer is always safe. But this can be emulated by offering the same kind of guarantees. For example, I’ve never seen a warranty offered for a web site — but why not?
Problems for freelancers
Where do I begin? A not so obvious problem is who owns the client relationship? They do of course. This is a problem for communication, trust, and longevity. Freelancers grow their business through great relationships with clients, not by completing to do lists.
Getting paid can be tricky. Sometimes the customer is not always right, regardless of what you may have heard. And I’m afraid you are a 2nd class citizen of the freelance bidding site due to the direction the money flows. They will always rule in favour of the customer, even if it’s their fault.
Freelance bidding sites operate under a thin veil of being an independent arbitrator. Facilitating what looks like a free market, but is actually a race to the bottom. Like a free market, businesses pay a tax when they win a bid and make money. But unlike a free market, control is in the hands of the bidding site and their own interests.
They are great for getting started though. If you don’t need to earn much money, you can make some starting capital using these websites.
How to take advantage
So you didn’t read this just to hear me rant about bidding sites, you came for a competitive edge right? Here are 2 things I would use them for:
- Grab attention by bidding what you think the job is worth, rather than competing. Then put some real effort into a persuasive pitch, that draws out those customers looking for quality, not cheapness.
- Analyse and copy the good parts of their marketing strategies, for your particular service or niche. For example, these sites are great at SEO and content marketing.
If you do nothing with them, you can at least revel in the thought that the services on offer are so basic, they will be done by computer AI in a few years. If you want to build a strong, sustainable freelance business, do things for your customers that make you hard to replace.
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