Pros and Cons of Using UpWork (as a Freelancer)

Just over two years ago, we started Water Bear Learning. And since then, we've been busy developing learning programs and designing videos for clients all over the world.

But running a small business is more than just designing videos. It's more than just doing the work you're hired for. You've got to be on top of your marketing, your finances, your business development strategy, your project management, your long-term growth strategy. And arguably the most challenging, your sales.

Finding new clients

As expected, the most success we've had finding new clients has been from leveraging our own personal networks. If you're just starting out as a freelancer or service-based contractor, your deepest and most reliable client-base will almost always be found through connections of people you already know.

But there are other channels worth exploring. In the internet age of the gig economy, it's now easier than ever to find contract work online. One sales channel we've been experimenting with in recent months is called UpWork.

UpWork is an online job site for freelancers/contractors to find new projects and clients. Whether you're a web developer, photographer, or SEO specialist, UpWork hosts a wide range of client projects to fit almost any freelancer skillset.

How does it work?

You create a free profile, upload a portfolio, set an hourly rate, and start searching for projects. Each project you apply for requires a certain number of "connects" (up to 6). Connects cost $0.15 each and can be purchased in bundles.

Once you find a project that fits your skill set, you submit a proposal. If the client enjoys your proposal, they send you a message and set up a time to chat.

If the client wants to hire you, they initiate and complete the offer entirely through UpWork. You complete the project and the client pays you through UpWork's secure payment system. You link up your bank account and get paidddd.

Pros of UpWork

1. They have higher-paying projects than other sites: UpWork has positioned itself as the "luxury" freelance job site. Compared to budget freelance sites such as Fiverr or Freelancer.com, UpWork clients are more likely to pay higher rates for your services. That means they expect higher quality work, concise communication, and exceptional attention to detail. UpWork also has a "U.S. Only" feature where clients can post jobs exclusively for talent within the U.S. UpWork claims these jobs pay 75% more than other postings.
2. You often get hired quickly: Most clients on UpWork are ready to start ASAP. If a client likes your proposal and you rock the phone conversation, you may be starting on a project the very next day. This is certainly a benefit compared to the more traditional modes of hiring that can take months of coordination and paperwork before you even begin work on a project.
3. It's easy to get paid: Sending invoices and accepting payments can be a challenge as a small business or independent contractor. One major benefit of UpWork is that payments are built-in to the system with the click of a button. You can easily link your bank account to UpWork and payments are automatically transferred into your account. Easy sneezy!
4. You can work remotely from anywhere: This is kind of a no-brainer, but working remotely is a huge benefit of getting hired on UpWork. Almost every client is familiar and comfortable hiring remote talent and understand how it works. We have a handful of friends that pick up projects on UpWork and then travel the world. The flexibility of working where you want when you want is truly unbeatable!
5. Their new structure boosts your chances of hire: UpWork has a new structure where they have begun charging freelancers a small fee to submit proposals to projects. While this may seem like a con at first, this additional barrier to entry for submitting proposals helps reduce clutter that clients have to sort through. It pushes freelancers to be more stingy with their proposals, submitting only to projects where they are highly specialized, and reducing the number of total proposals submitted. With fewer total proposals and higher quality freelancers, this new structure can boost your chances of getting hired.

Cons of UpWork

1. Their fees are quite hefty: In additional to paying to submit proposals, UpWork also charges a percentage for each project based on your total billings. The above chart shows their service fees, ranging from 5% to 20% depending on your earnings. While every company needs to make money, the 20% fee for smaller projects feels like a hefty chunk out of total earnings. It makes much more sense to go for the high-paying projects with clients that will have continuous work.
2. It's difficult to get your first client: There is a lot of competition on UpWork. And this can make it frustrating to get hired for your first project. I applied to 50+ gigs and took 15+ phone calls before landing my first project. But the good news is that once you get your first client, it's much easier to get the next one. Your profile shows your total amount of prior billings as well as reviews from past clients. This serves as a huge boost to your credibility making it much easier to close future sales.
3. Most clients still have smaller budgets: Although I mentioned above that this is the "luxury" freelance job sites, clients on UpWork will have significantly smaller budgets compared to those in your personal network. And that makes sense. Clients searching for contractors on UpWork are looking for an individual with low overhead costs, as opposed to paying an agency or consulting firm. Not a huge con as smaller budgets are to be expected on sites like UpWork, just something to keep in mind as you assess your personal business goals.
4. Their website user-experience is poor: This one has me mind-boggled. At first glance, it seems like a fairly modern website. But once you begin browsing and searching for projects, you'll quickly see how outdated the user-experience is. Features like saving your search, filtering results, and obtaining a verification badge appear to be very simple. But once you start clicking around and reading their 'help' guides, you find that the functionality is quite poor. Not a huge con, but something that could be easily improved!

Sooo should you use UpWork?

Overall, my consensus is yes. UpWork provides a helpful bridge between traditional sales and this new, digital gig economy. While it does have some drawbacks in terms of fees and barriers of entry, the flexibility of remote work and quick time to hire are immensely beneficial in the eyes of the ambitious freelancer.

If you're new to freelancing or looking to explore more sales channels for your small business, I certainly recommend giving UpWork a try.

To learn more about Water Bear Learning, follow us on LinkedIn or contact us now to hire a learning consultant or video designer.