The Way We Work
October 28, 2009 by Guest Blogger

Recently I've seen some tweets from those curious about the presence of extremely low bids on oDesk.

My response is that it doesn't matter. Or at least, it shouldn't.

Face it, if the only thing that makes you a viable candidate for a project is your price, then you'll need to have the lowest bid. But is that the kind of freelance or contract work you want?

This isn't a groundbreaking thought, but perhaps I can offer the perspective of an active contractor and bring some of the philosophical arguments into the real world. I'm self-employed and manage the technology needs of small businesses, consult on various projects, and write software. I use oDesk to manage all of my contract web development work. In that field, you'll find some jobs with hourly rates of $10, $5, and even $3, yet I have active and ongoing projects at much higher rates.

Last November, in an interview with the BBC, I expressed that I was satisfied with the amount of work I had through oDesk, but was confident I could get more if I wanted. A little less than a year later, things have slowed down and I decided it was time to start bidding on work again. A few weeks ago I started actively bidding for new oDesk jobs. Here's how I view the process - in some admittedly broad strokes:

Understand that you're not going to get - or even be considered for - some jobs. Some buyers are looking for the lowest bid - and for some jobs that is fine. Other buyers won't be able to meet your rates, which may very well mean they can't afford what they say they want. Don't let a candidacy that ends with 'rate too high' shake you. Just as the buyer limits their potential providers by the constraints of their budget, your rate limits your potential jobs - and that's a good thing. It helps you weed out the jobs that aren't as valuable as the service you provide.

Don't let a low average bid affect your rate. oDesk recently changed how much information you are able to see about other candidates when you visit a job posting, but you'll still see how many people have applied to that job and the average bid. Don't use that to set your rate, though. Your rate should be determined by the value of your work, your skillset, your experience, and many other factors. It shouldn't determine the way others value their work, their skillset, or their experience. In the same way, remember that the kind of provider a buyer is looking for - and the budget they have - isn't tied to the average bid amount.

Forget where you live. If the only justification for your rate being higher than other providers is that "it's more expensive where I live", then you need to find a job in an office near your house. It doesn't matter what you think of tariffs and protectionism, oDesk is a global marketplace. You're competing with providers in different countries, as well as different economic areas in a single country. Your rate shouldn't be determined by the cost of your mortgage, or the price of your dinner, it should be determined by what your work is worth.

There's nothing wrong with starting slow. When you're starting out, it may take some time to figure out what your work is worth. To get your first few jobs, you may need to bid lower than what you want to be making in the long term. Then, once you gain experience and reputation on oDesk, you can increase your rates. While you shouldn't let the rates of others affect what you set as your own rate, you do have to be aware of what the market will accept. Keep in mind that you don't have to be competitive to the entire oDesk market, just enough to provide the amount of work you want. If you have a few jobs in progress, it may be a good time to increase your rates, start bidding jobs, and see if you can be successful with a higher rate.

Focus on the right jobs. Things like a good cover letter, examples of work, certifications, and oDesk groups can make you stand out from other providers. But after a while you get a feel for what jobs best fit your profile of skills and experience. Some jobs don't require the amount of experience you have, some jobs aren't the kind of work you find yourself getting hired to do. If you really want to stand out as the right provider for a job - focus on the type of job that consistently results in positive feedback.

Is it possible to get work on oDesk with a rate far above the average provider rate in your field, or for a specific job? Yes. It just may take some time, and a bit of determination.

When I started bidding for jobs on oDesk my rate was about a quarter of what it is today. Close to a thousand hours on oDesk means something - but it doesn't mean everything. Honestly, the biggest change in my rate came not because I felt I'd established a track record on oDesk, but because I realized that I didn't need to worry about what others were charging. I know what my time is worth outside oDesk and - since I've proven I can work just as effectively through oDesk - there is no reason for my time on oDesk to be worth any less.

Was my claim to BBC still accurate, as I started actively bidding on oDesk jobs? For the past month or so I reviewed each job that matched my (rather broad) search terms. I know that the jobs I get tend to be single-developer, long-term jobs, with a buyer who has some familiarity with web development, yet needs high-level requests to be understood and implemented. Those were the jobs I focused on. Even still, for most of the jobs I received no response. But one job - on which I bid my usual rate, even though the average bid was lower than the rate I started on oDesk with - has panned out. Now I have another ongoing contract job, at the rate I set, and feel is acceptable for the services I provide.

And yes, I'm confident that in the future, if I want the work, I can go to oDesk and find it.

timlytle

Tim Lytle is a Technology Consultant & oDesk Contract Web Developer. Owner of timlytle.net ltd since 2003, his oDesk adventures have been mentioned on the BBC’s Click and in Forbes Magazine.

  • http://www.facebook.com/pages/Vinay/211950622207946?v=wall vinay

    This is nice article for bide ,thanks for sharing this information about odesk bide . This is important point for odesk..............

  • Nikko

    Can oDesk make a rule to rate only $1.00 above because some employers are abusing and make some advantage.specially those new contractors

    • Erica

      Nikko, oDesk does have minimum rate guidelines, however it is up to the contractor to dictate a rate that makes sense for them and values their work appropriately. One of the reasons Tim has been so successful is because he declines to pursue jobs where the employer is obviously going for the lowest possible rate--instead, he chooses to work on assignments that value his skills and abilities and allow him to command the hourly rate he deserves.

  • http://bit.ly/cj4nSZ Tim

    Seems like there's been some recent traffic to this post - thanks for all the comments.

    @Michael It was not my intention to sound 'pandering and parental'. If you're working with oDesk, you do have to forget where you live when it comes to justifying your rate. oDesk is a global marketplace.

    As to starting slow, if you've already established yourself in a field, then you should already have a rough idea of what your hourly rate should be. If an buyer is serious enough to not just pick the lowest bid, then they should be willing to consider your work history outside of oDesk.

    Sure, you may have to bid a little lower at first, but (again, assuming you're already established in your field) your rate should be able to rise quickly. At one point I took a lower hourly rate for a smaller 'trial' project, to prove what I was worth. After that the buyer increased the rate to what I was originally asking.

    I do remember what it was like starting out on oDesk - and that's why I hope my advice is helpful to others.

    Like I said, "Honestly, the biggest change in my rate came not because I felt I

  • http:abigail_theamazinglife.blogspot.com Abigail

    That's a good tip for those who really wanted to be hired. Well, I started with a very low bid, $1 per hour. That's my way to be recognized by employers especially that I'm a newbie. I was hired and proved that I am capable of doing the task. When I was given a different assignment, that was the time I asked if the hourly rate is still the same with the past projects. They cancelled the contract then started a new one with a higher rate. We are both happy with that and I started working full time.

    Thanks for sharing this tips with us. Good luck to everyone on oDesk.

  • http://www.facebook.com/profile.php?id=1207114574 Michael Stelly

    You have some valid points. I appreciate your perspective on the issue. In contrast, however, it seems to me you are comparing your extensive oDesk billable time to those without the same experience from which to draw. It comes across to me as pandering and parental. Comments like "forget where you live" and "it's ok to start slow" aren't realistic. Maybe you've simply forgotten what it was like to be out of work in a dismal economy.

    I didn't arrive at oDesk because I wanted a change of pace from my comfy, luxurious office job. I arrived with no job and no prospects anywhere near my location. I have real-world pressures to earn an income that supports my family now, not some indeterminate time in the future. And the reality is that without an established reputation, one is at the mercy of the bill rate because something is better than nothing when the bills come due.

    I would recommend remembering what it was like for you just starting on oDesk not knowing what to do or how to "play the game". Maybe that will temper the high-handed tone of this blog.

    Thanks for letting me voice my opinion.

  • Ma. Cecilia Tabuena

    Thank you, Tim for this wonderful tips!
    We,providers will surely benefit from it!
    Good luck !
    Have a nice day & God bless!

  • http://www.odesk.com/users/~~0cb31ce38a94010e Horacio M.C.M. Atupan

    Tim,

    Great Tips & advises. By the way, sign me up then or will you give me a chance on any of your job vacancies?

  • http://www.facebook.com/profile.php?id=1427839793 Dave Robinson

    I've been saying this for years:

    Compete on the value of your work. My rate is well above my category average and I still find lots of work.

    Start selling yourself as a unique individual, and you'll stop thinking about competing on price. When it comes to setting your price for your services it doesn't matter what other people are charging for something else.

  • http://www.facebook.com/profile.php?id=1566921811 Gary J. Harris

    Tim

    Thank you for this post, I printed it out as a cornerstone to success on oDesk.

    I am thinking that over the next period of time, providers and buyers who live far away form any of us will become more and more important. I see oDesk as an excellent way to make connections all over the world.

  • Theodora

    Tim

    I recently read yoir blog regarding low bids and your comments have given me the incentive to start bidding again. I had become so depressed seing providers bidding $.56 an hour and now I see more jobs only willing to pay less than $1 for extremely high volume services. While I understand the economy demands price adjustments but what happened to standards. I have reduced my bids but am still finding it hard to get invites when someone is willing to do the same thing for almost free.

  • http://www.teamkreate.com Kei

    Great Post Tim! As with any work, you should start somewhere. In Odesk, the usual case is by starting with a lower rate. But it helps in proving yourself and your work to your clients and eventually reaching the higher rate you want/deserve. Good luck to everyone!

  • Pingback: The Week in Freelance: November 6th - The Freelance Rant

  • http://www.sarakhaley.com Sara Haley

    Love it! I agree with Heather--that line is very inspirational!

    Sara Haley

  • http://hireheathervilla.com/ Heather Villa

    Excellent blog!

    "Your rate shouldn