Freelance Marketplaces, like Elance and Rentacoder, have grown very popular with freelancers and their clients because they are a ‘platform solution’ to many freelancer business problems. For a small(ish) fee, freelancers enjoy many benefits. What are they, and why use these platforms?

You might already be familiar with these platforms, and use them regularly. If that isn’t the case, then are you not wondering yet why you don’t get as much work as you would like?

The Power of the Freelancer Marketplaces

Freelancer Marketplaces connect buyers of work with providers of work. Simple really. What they do is provide an exchange where buyers post jobs with a specification of the work, and then providers bid for that work, followed by the buyer’s selection of the provider who has offered the best price or deliverable but also with credibility. These platforms provide a commercial process that manages the flow of information, requests, proposals, bids, payments and feedback, making it really easy to do business.

Here are the 10 big reasons why you should use a Freelancer Marketplace as a freelancer:

1. Access to a massive project portfolio- the number of leads available are considerably larger than any single freelancer could generate on their own. At the time of writing, there have been almost 22,000 jobs posted on Elance in the last 30 days.
2. Buyer vetting – if you’re providing services based on a relationship and trust alone, how do you know you’re not going to be ripped off? With these platforms, you can learn about your buyers before bidding for jobs. This means you can check out buyer’s credibility (just like buyers check you out). I think the most important things to look at is the buyer’s project award rate (how many projects they actually award against posting), their purchase value (the higher the value, the greater the commitment by the buyer) and most of all, feedback left by other providers. This is a two-way street.
3. Connectivity- buyers and providers are connected to each other just like people are in Facebook or LinkedIn. No need for phone books, search engines, or anything like that. The whole market is brought together in one place.
4. Quickly Paid Bills- one of the best features of these platforms is their ‘escrow’ services, which means you should never be ripped off again by buyers who don’t pay. Why? Well, using the escrow service means that the buyer must already pre-fund your work before you start. The money is held by the platform, and then released to you once you complete the work. So, you’ll always know that your client has the funds before you get working.
5. Free Marketing- these platforms offer you free marketing through your profile. Your profile typically shows your track record, customer ratings, number of repeat customers, etc. and the best thing of all is that the data is provided by a 3rd party – Elance, Rentacoder, etc – so it is trustworthy. You only pay for marketing at the point you are paid for the work you provide.
6. Project Tracking – the platforms typically provide project tracking through the use of ‘milestones’ (major events in the project, such as start and end), and they support the sharing an storage of documents relevant to the project.
7. Payment Collection & Processing- payment is collected through the platform through your PayPal account (or credit card). And all payments are in $USD, no matter where the work gets done
8. Terms of business – freelancers working outside of these platforms need to ensure they are protected by a terms of business. The platforms provide these automatically and also manage the process of finalization and acceptance.
9. Feedback – buyers can (and should be encouraged to) leave feedback for their providers. It’s a satisfaction rating that is recorded against the provider’s profile and forms part of the free marketing benefits of the platforms.
10. Standardization – the commercial process of ‘provision’ is fully managed to the platform’s standard, so that means you use the same process for every client you work with in the marketplace. This allows you to optimize your own ‘workflow’, saving you bags of time which means more cash in the bank.

Elance

Elance is the platform of choice for me as it offers the widest variety and volume of jobs, from programming to admin, and it is the slickest site of all. Fees vary from 4% – 6% of job value(so make sure you incorporate this into your pricing and commercial considerations) and there is an additional 2.75% feeif you use their payment processing. These costs are likely to be clawed back by a reduction in marketing costs, efficiencies and no lost interest due to late payments. There is an easy admissions test, yet the sign up process is straightforward and quick to complete. So far, Elance has enabled over $135m USD of work since 2005!

Rentacoder

Rentacoder comes from a more IT developer stable and has over 100,000 registered buyers and over 230,000 registered coders. The kind of jobs that appear on Rentacoder are wider than just programming jobs (such as writing) although it’s branding is still on the geeky side.
 

Other Uses of Freelancer Marketplaces

There are other uses of Freelancer Marketplaces other than what’s stated above. Because they are platforms for conducting business through a repeatable commercial process, I strongly suggest that you conduct all your business through them, even on jobs you have found and agreed outside of the platform. Why? Well here are two good reasons:

1. You can exploit the escrow services for your work to ensure your supplier can pay you, and that their are arbitration processes should their be a dispute.
2. You will gain recognition and build your profile for this work, even if you and your customer didn’t find each other through the platform. This way, you’re building up your portfolio as a basis of credibility when you bid for work with other buyers.

In addition, you can use these platforms to benchmark your rates and services against other providers in the market, even if you don’t do business through the platform. Chances are, your customers will be looking there too, so don’t bury your head in the sand.

These platforms can support fixed-cost projects, as well as jobs based on time and materials. Whatever job you do, see if these platforms can be used to manage the commercial process.

Flip the model – use these platforms to outsource work if you can personally apply your time to higher value work. For example, outsource admin, submissions, writing, etc.

Conclusion

Freelancer marketplaces offer great benefits for a small fee. If you can make the price you pay work for you (by saving you time, lost revenue or increased efficiency) then they come highly recommended. They’re free to sign up – what have you got to lose?

• See what’s happening at Elance here.

• Check out Rentacoder here.

©2012 SimonStapleton.com. All Rights Reserved.

The majority of freelancers in IT have their head in the sand, as far as their personal performance goes.

IT leaders from across several industries have commented to me that freelancers tend to move from appointments without seeking feedback on their performance. It’s estimated that over 60% of freelancers do not receive regular feedback on their service and conduct, and over 90% do not formally obtain a performance review.

The issue for freelancers that don’t gather feedback and review their performance is that they often receive the ultimate in feedback – not being renewed.

Freelancers are workers, just like permanent staff, although they are generally employed under a terms and conditions specific to the freelancer or agency. But in every other sense, they are employees. So why should the career and personal development needs of freelancers be any different to permies? There is one key difference, and that is freelancers are brought into an organization because of a specialist skill and because that skill can be made effective immediately.

I stress the word immediately as it is an important point. To be effective immediately means that a freelancer must be savvy enough to fit into a wide variety of business situations and have the awareness of their impact to adjust behavior quickly. A freelancer therefore comes with great technical skills and also great interpersonal skills.

The prevailing view though is that freelancers bank and freeze their skills at the point they become freelance, and don’t make special efforts to improve and learn to enhance these skills. So it seems the value of a freelancer can diminish the longer they are in freelance employment! I am not saying this is true in every case – in fact I know of many freelancers who are aware of their performance and their impact. But there are many freelancers who don’t, and in my opinion these tend to be the more technical freelancers who provide niche and specialist services.

In blunt terms, it’s arrogance. Freelancers on the whole assume that their skills have lifetime value and that they are the finished article.

However, freelancers remedy this situation by taking some simple actions. Here are a few I’ve experienced:

• Use mult-rater/360-degree feedback as a formal way of gathering feedback – taking time to gather feedback and listen to their clients about their performance, using a formal method. This is a commonly found process used by permanent staff and is often regimented by their employer as preparation for formal performance reviews
• Join a ‘Better Business Bureau’ – Better Business Bureau’s are communities of business people who discuss and share information. They can involve participation in forums and one on one coaching sessions by experienced business people
• Join a professional contractor group – these groups help freelancers to understand and employ best-practice and high standards. They also involve forums but also provide support, such as legal counsel, and offer clubs for consuming services such as accountants
• Join a business network/referral community – Business networks are an excellent source of referrals for work, but they also provide freelancers with information on their performance and reputation. Obviously, a high number of referrals = good reputation. By joining a business network, a freelancer exposes their reputation to be challenged which makes for good learning

Human Resources in organization’s are also culpable for this situation too. HR departments don’t take enough responsibility for the development of long-term freelancers. If over a contract period the freelancers rate remains the same or increases, reducing productivity and effectiveness means that the freelancer becomes expensive – but this increase in cost is hidden. Some HR departments I’ve met get this, and they tend to:

• Conduct formal assessments of a freelancer’s performance for long-term contractors (12 months or over)
• Tie in bonuses to performance
• Set regular goals and objectives based on service improvement and improving quality
• Allocate a regular slot to review performance
• Encourage mult-rater/360-degree feedback, even if their organization doesn’t use it

In summary, feedback and reviewing performance is a key aspect of being a freelancer and the savvy freelancers take steps to gather feedback and review their performance in order to improve the service they provide.

Freelancers! Hurry and take One of Ten Nine free spaces on my Feedback course, normally $300.00!

Course Details: SS01f - How to Achieve Repeat Business, Referrals & Personal Excellence using 360 Degree Feedback. This is a 3 week course designed for freelancers to gain repeat business and referrals through the process of 360 feedback. The course comprises of a mixture of reading, discussion and practical engagement with your colleagues. ($300.00 USD pp)

The course starts in September and is run online with a small number of one on one discussions by telephone.

Hurry! Offer ends August 25 2008. Contact me using the details on the About page for more details.

©2012 SimonStapleton.com. All Rights Reserved.