Being An Upwork Freelancer | The Pros and Cons
My freelance career initially got off to a slow and frustrating start. I was replying to Craigslist ads and writing content and posts for a number of content mills. It wasn’t until I found oDesk (now Upwork) and started being an Upwork Freelancer that things started to change. In fact, within 8 months of starting on Upwork, I had scaled my freelancing business to six-figures and I was able to retire my husband.
It’s safe to say that Upwork played a large role in changing our family’s life.
I KNOW Upwork gets a lot of hate! I’ll admit there are some components of the platform that I’m not thrilled with myself. However, I have first hand experience with the fact that the pros of Upwork absolutely outweigh the cons of Upwork.
Let’s dig in and explore the pros and cons you’ll encounter while being an Upwork freelancer. But first, here’s a quick overview of what exactly Upwork is, just in case you haven’t been introduced to this freelancing marketplace yet.
What is Upwork?
Upwork bills itself as a “global network of skilled freelancers and professional agencies.” The platform serves as both a matchmaker and middle-man.
Businesses, startups, entrepreneurs, and similar post a job on the site and then freelancers submit proposals for the jobs which interest them and for which they’re a good fit.
Once a freelancer has submitted a proposal, the client will initiate the interview process if they are interested in talking further. Upwork facilitates the interview process through their own communication hub.
When a freelancer is hired for a job, a contract (either fixed-rate or hourly) is started. Hourly contracts employ the use of Upwork’s time tracking software. When a contract is completed, the freelancer is paid through the Upwork platform and the client has the opportunity to leave a rating and review. The freelancer can also rate and review the client.
Now that we’ve gotten that quick and simplified overview out of the way, let’s look at some of PROS of being an Upwork Freelancer.
Pros of Being an Upwork Freelancer
- Wide range of opportunities and clients. I have worked with clients from all over the world on a variety of fun and exciting projects over the years. At one point, my freelance business on Upwork was truly global – I congruently had a client in Dubai, a client in the UK, a client in Australia, a client in Germany and three clients in the U.S.
- Easier and faster to connect than cold emailing, building a website from scratch, networking on social media or attending networking events. While those things may work (and are good avenues to explore as you continue to scale your freelancing business), they take a lot of time and potentially, money. They can cause frustration and endless headaches as you try to build your reputation and find the best places to connect with the right-fit people that are in need of your services.
- Allows you to quickly and easily get started and get your first job or two under your belt. If you just want to make sure freelancing is the right path for you, you can use Upwork to find a small, fixed-rate or short term job or two.
- Helps you gain confidence, battle impostor syndrome and build a robust freelance portfolio. Can you really handle managing social media for a large corporation? Is your writing good enough to write a sales page for a startup? Do you really have the tech skills required to build a blog for an ecommerce company? Questions like those will likely enter your head when you decide to start freelancing. You’ll battle with knowing that your skills are transferable to a freelance environment and if they are truly worthy of getting paid the rate that you want. With Upwork, you can test that out and build your confidence while working on simpler projects. Continue to advance the types of jobs you apply to as your skillset and mental fortitude expand. And all the while, build yourself a portfolio of successfully completed freelance projects that you can share with any potential clients in the future.
- Easy to scale within AND/OR from. Just like I mentioned in point 4 above, it is easy to scale your business as an Upwork freelancer as you complete projects. Over my first year on the platform, I increased my hourly rate by $5 for each contract that ended successfully. I was also able to use that success to scale my services with non-Upwork clients as well.
- Built in payment security with hourly jobs. No chasing down clients to pay invoices. This one is a HUGE benefit, especially if you’ve even been the victim of a client that’s ghosted you just before your first payment is due. Upwork freelancers are guaranteed payment for every hour clocked through the time tracker because the client’s payment is verified and there is an escrow in place.
- Build relationships. Take clients off of the platform. Working with both clients and other freelancers through Upwork is a great way to build relationships that benefit your overall freelancing biz. I’ve been able to use those relationships as referrals for non-Upwork clients. One of my clients recommended my services to his wife. Another time, a freelancer I worked with a client project on hired me to manage her off-Upwork brand’s social media. (Note: as far as taking Upwork clients themselves off of the platform, please be aware of Upwork’s TOS.)
- Long term clients with built in raises. The Upwork platform simplifies the freelancer relationship for clients so much that it makes sense for a client to keep you around long term, as long as they are happy with your work and your duties are still required. I currently have two clients that I’ve been working with since 2012. Additionally, the commission fee that Upwork takes from your pay (more on that below) is done on a sliding scale based on money-based milestones. Once you’ve earned $501+ with a client, the fee drops from 20% to 10%. And then, once you’ve earned over $10,000 with the same client, the fee lowers again to 5%. Those decreases amount to a nice “raise” for the freelancer!
- Robust platform capabilities. Freelancers on Upwork have the ability to create an optimized profile to show off their skills, add a personal video, etc. Upwork also provides freelancers and clients with a built in communication hub which eases organization and also adds an extra layer of protection for both parties.
- Business basics are streamlined. This is a tremendous for shoestring and/or time-strapped freelancers! As an Upwork freelancer, you do not need to form an LLC, you receive one tax form each year and Upwork manages your invoices and deposits.
Cons of Being an Upwork Freelancer
- Job listings can become a “race-to-the-bottom” pricing war, particularly when you are competing with global talent and freelancers that can make an incredible living on $4 an hour. (I’ll be diving into numerous strategies to combat this in an upcoming post.)
- The platform isn’t immune from scammers. Like anything, scams are everywhere and you have to keep an eye out for red flags and trust your gut instinct. If it looks and smells like a scam, chances are…
- If you work an hourly job, you have to be “on the clock” and turn on Upwork’s time tracker which monitors keystrokes, takes random screenshots of what you are working on at various intervals and shuts itself off if you are inactive for too long. Some freelancers may dislike this level of intrusiveness or feel it too closely mirrors a traditional 9-to-5, punch-the-clock setup.
- If you work on a fixed-rate job, your payment is not covered under Upwork’s payment guarantee. A fixed-rate client may open a dispute over work that you’ve done and when Upwork investigates, they may determine the client is in the right and that you are not entitled to the payment.
- Unhappy clients can have a negative impact on your profile. A negative review from a client is impactful and will affect both your Job Success Score percentile and your status ranking Additionally, potential clients will be able to see that negative review when you submit a proposal.
- Can hinder your growth if you’re not focusing on scaling. If you don’t have a good growth strategy in place, it’s easy to just keep pushing away at Upwork jobs. This can lead to no diversification in your income streams while also limiting your ability to grow your business through hiring as you are required to be the one “on the clock” and earning the money.
- Upwork tends to side with the clients, not the freelancers. I’ve never experienced this personally, though, and have had nothing but stellar experiences any time I’ve dealt with anyone on the Upwork team, but I have seen this complaint from other freelancers in forums, Facebook groups and other places.
- You might need to spend a lot of time applying for jobs, especially in the beginning. Additionally, the interview and negotiation process may drag on and you could potentially find yourself have to support and validate your rates to potential clients.
- You have to use a real photo and your real name on your profile. Personally, I’m not sure why anyone would ever view this as a negative but I know it might be a deal breaker for some people.
- The FEES!!!
Upwork’s Fees Explained
One of the most common complaints about being an Upwork freelancer are the associated fees.
Fees that directly affect freelancers:
1. Upwork charges a service fee, which is taken as a percentage of your earnings on Upwork. It is a sliding fee based on your lifetime billings with each client (across all hourly and fixed-price contracts):
- 20% for the first $500 you bill your client across all contracts with them
- 10% for total billings with your client between $500.01 and $10,000
- 5% for total billings with your client that exceed $10,000
2. Freelancers have to spend “connects” to apply to projects. Upwork charges $0.15 per Connect. They claim that the typical monthly freelancer will spend around $5/month on connects.
Depending on the job type, you will use between one and six Connects to submit a proposal. Larger earning potential jobs require 6 connects per proposal.
If you are invited to a job (clients have the ability to search the Upwork talent pool and send invites to freelancers they think are a good fit), you do not have to use connects to submit a proposal.
You buy connects in bundles and any that you don’t use in a month will rollover to the next month. Here are the bundle packages:
- 10 for $1.50
- 20 for $3
- 40 for $6
- 60 for $9
- 80 for $12
I’ll be diving into connects in full in an upcoming post, including tips to help you make the most out of those connects so that you’re not just throwing away money.
The other thing that freelancers need to be aware of from a fee perspective is that clients ALSO have to pay fees. They pay a 3% payment processing and administration fee on all payments.
All of these fees should be kept in mind when you decide your rates.
If you’re interested in learning more about being an Upwork freelancer, I’ve put together a 4-part Upwork video training series that you can check out.
If you’re ready to launch your freelance business on Upwork and get off to a successful and profitable course, my 6-week course, ‘From Beginner to Upwork Unicorn‘ is just what you’re looking for!