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One of the main concerns for freelancers is getting quality work. Many freelancers use online marketplaces to find the best opportunities, such as Fiverr and Upwork. Through an easy-to-use platform, these platforms connect freelancers to clients to earn income and build a small business. So, how do these platforms work for freelancers?
How does Upwork work?
Upwork is a freelance job network that spans 180 countries and is one of the world’s largest freelance marketplaces. Upwork was founded in 2015 following the merger of two freelancing sites, Elance and oDesk.
On Upwork, clients create job postings that are displayed on job boards, organized into 12 categories, such as accounting, legal, development, and writing. Freelancers bid on jobs by submitting a proposal. The client then chooses freelancers to interview from the pool of submissions. Additionally, clients can send invitations to freelancers, asking for a proposal and job interview.
To bid on jobs, freelancers need an Upwork profile, which becomes their resume, portfolio, and personal marketplace. Once the profile is completed, the freelancer can peruse the job listings and start applying for jobs using Connects. Connects are Upwork’s virtual money system that freelancers use to bid on jobs. Upwork’s basic freelancer profile automatically includes 10 Connects per month.
Upwork also allows freelancers to create project packages they can sell on their profiles. Buyers can purchase projects at any time, so in this case, the clients directly come to the seller.
Projects on Upwork range from short-term to long-term work paid hourly or at a fixed price. The platform incentivizes long-term relationships with a sliding scale for service fees.
Pros:
- Long-term work
- Hourly rate and fixed-price projects
- Variety in how to get work: applying for jobs or creating project packages
- Lots of career support and learning opportunities
Cons:
- A lot of competition
- Hard to get started without reviews or Upwork experience
- It takes a long time to build up a solid profile
- Few free Connects are available to bid on jobs
How much does Upwork cost to use?
Upwork is free to use. However, there is only a limited number of free Connects per month in the basic freelancer profile (10 per month). Freelancers can upgrade their profile to the Freelancer Plus plan that grants users 80 Connects per month, plus additional features. The upgraded profile cost varies but typically starts at $14.99 per month.
Although the site is free to use, there are costs once you begin earning money. For example, Upwork initially keeps 20% of earnings as a service fee.
How does Fiverr work?
Fiverr, founded in 2010, is another freelancing platform that connects clients to gigs, or purchasable project packages. In 2021, Fiverr had 4.2 million customers purchase a service across 160 countries. Originally, gigs on Fiverr sold for $5 (hence the name). Now, sellers can set different prices, with $5 being the lowest base price.
On Fiverr, freelancers, called sellers, create an online marketplace to display and sell available services in a wide range of categories (i.e., copywriting, graphic design, social media, or voiceovers). Fiverr has over 550 categories to choose from, allowing freelancers to sell just about any legal service. Usually, the buyers come to the seller after searching for a gig. The buyer then purchases projects for a fixed price determined by the seller.
Each gig page contains information on what the client can expect from the project, including timeline, cost, deliverables, and add-ons. Often, gigs are purchased as a one-time project—so sellers may have many different clients each month.
Once a buyer purchases a gig, the fee is paid in advance and held by Fiverr until the seller completes the work to the buyer’s satisfaction. After the buyer clears the project, Fiverr releases the funds to the seller, minus a 20% service fee.
Pros:
- Easy to get started
- High client turnover, so freelancers get experienced quickly
- The site pushes reviews
- Generally, projects are quick and short-term
Cons:
- Competitive
- Low-priced work, especially in the beginning
- Less emphasis on long-term work
How much does Fiverr cost to use?
Freelancers can create a Fiverr profile for free. However, like Upwork, fees come from the seller’s earnings. Fiverr keeps 20% of all earnings, including tips.
What are the primary differences between Fiverr and Upwork?
Fiverr and Upwork are similar in that they are both platforms that connect talent to buyers. However, these two platforms have some distinct differences that set them apart. For example, Fiverr focuses on the strength of individual gigs and short-term work. In contrast, Upwork focuses on the freelancer’s overall profile rather than individual services and incentivizes long-term work.
Some of the other key differences include
- Quality of jobs
- Fees
- Getting paid
- Common complaints
Quality of jobs
Both sites can offer quality jobs; however, finding these quality projects depends on marketing gigs to attract quality clients and interviewing potential clients. Additionally, an impressive profile and work history improve the chances of landing a quality job.
Upwork–
Vetting clients is easier on Upwork because freelancers choose which projects they want to apply for and are given a chance to interview before accepting a job offer. This alone helps weed out scams and low-quality projects.
In addition, Upwork incentivizes long-term work, which can lead to higher-quality, consistent work. Nevertheless, Upwork has a fair amount of low-quality jobs or clients without a verified payment method, which may mean the freelancer doesn’t get paid. Upwork’s payment protection feature only applies if the client has a verified payment method.
Freelancers can earn badges such as Rising Talent and Top Rated if they meet specified requirements, like having high reviews. These badges are displayed on their profile, putting them in a special category. Usually, profiles in elevated categories attract higher-quality and higher-paying projects.
Fiverr–
Fiverr allows buyers and sellers to communicate via messages before work begins to see if they are a good fit. Still, Fiverr allows buyers to purchase and pay for a service without interviews or a proposal process. The benefit of this is that sellers can get work quickly but cannot moderate the projects ordered.
Part of marketing the gigs includes pricing each gig correctly to help attract quality projects and ensure fair compensation. Although Fiverr focuses on short-term projects, you can still find valuable and rewarding projects that also pay well.
Freelancers can apply to become a Fiverr Pro that puts the seller’s gigs into a Pro Service category. The application process includes a series of reviews to assess skills and experience. Usually, sellers with the Fiverr Pro status charge a higher price and are experts in their field.
Fees
Both sites charge a service fee on the freelancer’s earnings. The fees are used to maintain the site; after all, these freelancing marketplaces facilitated the connections. The fees vary slightly between the two, so let’s look at a few of the differences:
Upwork–
Upwork has a sliding scale system for fees:
- Earnings between $0–$500 are charged a 20% fee
- Earnings between $500.01–$10,000 are charged a 10% fee
- Earnings over $10,000 are charged a 5% fee
The fees are not reduced based on overall profile earnings. Instead, the lifetime earnings of each client apply to the sliding scale, promoting long-term relationships.
When a relationship between a freelancer and the client begins, the two parties agree to keep all work and payments through Upwork’s platform for the next two years. However, if the client and freelancer decide to take the relationship outside of Upwork before those two years are up, one of the parties must pay Upwork a Conversion Fee which is 3.5% of a freelancer’s hourly rate x 2,080 hours.
Fiverr–
Fiverr’s fee system is simpler than Upwork’s: it’s a steady 20% fee across the board, regardless of the amount earned with any client. The fee applies to all earnings, which include tips. Fiverr and Upwork may also charge a fee for withdrawing funds, which takes us to the next topic, getting paid.
Getting paid
One of the benefits of using a freelance platform is the safety of getting paid. Both sites offer payment protection, which improves the odds of getting paid and decreases fraud. Each site has a different method of in-site payments, so let’s look at each one.
Upwork–
All payments are made through Upwork’s site. Freelancers are paid at an hourly rate or a fixed price, and each method includes protections:
- Hourly contracts are protected if they meet certain requirements, such as logging time through Upwork’s desktop app and not exceeding the allotted weekly amount.
- Fixed-price projects are protected by escrow. The client deposits the fixed-price payment into an escrow account, held by Upwork until a milestone is met and approved by the client. Once the freelancer completes the project or a milestone, they can submit work for payment. The client then approves the work, and escrow releases funds to the freelancer.
After payments are made, the freelancer will go through a withdrawal process. Upwork offers various ways to withdraw funds from its site, including
- Direct deposit to U.S. banks (no fee)
- Direct transfer to a local bank (outside the U.S. and includes a fee)
- U.S. dollar wire transfer (includes fee)
- Instant pay for U.S. freelancers (includes fee)
- Paypal
- Payoneer (outside the U.S.)
- M-Pesa (Kenya only)
After you select a withdrawal method, funds are available at varying times:
- Hourly contracts bill weekly and are available 10 days after each billing cycle
- Hourly contracts for Top Rated freelancers are available 5 days after each billing cycle
- Fixed-price contracts are available 5 days after the milestone is approved
- Project Catalog payments are available after 5 days
- Bonus payments are available after 5 days
Fiverr–
All payments for work are made through Fiverr’s site. Buyers pay in advance for fixed-price services, and once the project is approved, the payment is released to the seller.
The seller then has several ways to withdraw funds:
- Paypal (no fee)
- Fiverr Revenue Card (includes fee)
- Local bank transfer (includes fee)
- Direct deposit (includes fee)
After gigs are marked as complete, there is a 14-day waiting period before the funds are available for withdrawal. However, top-rated sellers can withdraw funds after 7 days.
Common complaints
No system is perfect, and both freelance sites have a handful of common complaints. For example, one complaint they share is the service fee.
Some of the more common complaints for Upwork freelancers include the following:
- Highly competitive, hard to get started
- Lots of scam projects
- Potential for no payment if the client doesn’t have a verified payment method
- The fee schedule is high for low-priced, short-term projects
- Conversion rate is expensive to move off the platform
- Limited Connects on the basic plan
Some of the more common complaints for Fiverr freelancers include the following:
- No hourly rate options
- No sliding scale for fees
- High competition
- Lack of customer support for sellers
- Lots of scams
- Project caps
Which one is right for you?
Initially, it may be hard to distinguish which platform is right for you. However, some key takeaways can help you determine which platform will work best to your advantage.
Upwork may be best for you if:
- You want a variety of job options, such as the ability to apply on job boards or have clients purchase from your project catalog.
- You want hourly contracts.
- You are looking for a long-term relationship.
- You want to search and apply for jobs rather than wait for clients to come to you.
Fiverr may be best for you if:
- You want to get started quickly.
- You want to have complete control over the type of projects you work on by marketing specific gigs.
- You want shorter projects, a quick turnaround, and a high volume of buyers.
Are there alternative freelance job websites worth considering?
Getting good, consistent work as a freelancer takes time, but the investment benefits your career, and you’ll be able to work on some fantastic and fulfilling projects. Arguably, Fiverr and Upwork are the most well-known and easy-to-use freelancing marketplaces, but there are other sites out there that ease the hiring process between buyers and freelancers.
Some alternative freelance job websites include
Resources:
Fiverr business stats 2021 https://investors.fiverr.com/press-releases/press-releases-details/2022/Fiverr-Announces-Fourth-Quarter-and-Full-Year-2021-Results/default.aspx
Upwork country stat and conversion fee
https://support.upwork.com/hc/en-us/articles/360043723533-The-Upwork-Conversion-Fee
