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Fees and Long Term Relationships

I have been browsing the web to learn more about oDesk. I see that when oDesk started it charged a 30% fee which, a while ago, became a 10% fee. I also found a lot of discussion about buyers using oDesk to find providers and then stepping the relationship out of the oDesk system to avoid the fee, even though this is prohibited.

Looking at oDesk (bear in mind I haven't been here that long) I can imagine three sets of values that oDesk offers to Buyers and Providers:
1) Meeting and negotiating first time
2) Helping Buyer and Provider to develop a trust relationship
3) Providing an operating convenience for work, billing and payments over time

Smiley After a Buyer and Provider have successfully conducted business together the first time then value 1) disappears from that relationship.
Smiley Once a Provider has worked for a Buyer for about 6 months worth of full time work value 2) probably diminishes.
SmileyValue 3) probably remains at all times but does not represent value equal to a 10% fee.

My suggestion, to keep long term relationships within the oConnomy while keeping the 10% fee in operation, is to track long term relationships, and reduce the fee for work done within those relationships.

For example one year at 35 hours a week equals 1,820 hours. If a Buyer has paid for 182 hours of a specific Provider's work then reduce the fee after that to 8%, after 910 hours reduce the fee to 5% and after 1,820 hours reduce it to 2%. 2% is a residual amount that would not give the Buyer or Provider much incentive to skip outside the oConnomy. Couple that with the potential of being discovered and locked out of oDesk and I believe most long term relationships will stay in the system.

Remember, this fee reduction only applies within established Buyer/Provider relationships. That means that when a new Buyer/Provider relationship is initiated its back to the 10% fee for that relationship regardless of any other relationships the Buyer or Provider may have.

Vote Result

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Score: 7.0, Votes: 3
yep. i am with you on that.

yep. i am with you on that. sure, those ten percents are not what can attract long-term relations to odesk for sure.. 

Why do you think?

Danny S. wrote:
  three sets of values that oDesk offers to Buyers and Providers:

Smiley After a Buyer and Provider have successfully conducted business together the first time then value 1) disappears from that relationship.
Smiley Once a Provider has worked for a Buyer for about 6 months worth of full time work value 2) probably diminishes.
SmileyValue 3) probably remains at all times but does not represent value equal to a 10% fee.

I'd like to know why you (who have not been here long enough to even understand the system) see this as the potential outcome

 

A)  I have been on oDesk since November of 2007

B)  I am currently working for 5 providers that hired me originally in November of 2007 (under my original profile which you can't see as it no longer exists)

C) the 'value' that is in that fee is simple: The buyer knows that I'm working because they have the benefits of the screen shots to see what I'm doing - I have the benefit of KNOWING I am going to be paid for the work I've done.

I don't think you understand at all the value  of this service from either a buyer or providers perspective. I have been both so I speak from both positions.

Doreen

I have no problems with the

I have no problems with the 10% fee.  It's lower than many competing sites charge and the guaranteed payment alone makes it worth it.  When I do work for other sites I have to make sure that money is in escrow or take a risk when I send deliverables to a client because I cannot be sure they are going to pay me.

With oDesk I don't have to worry.  I do the work hourly and I know I'll be paid.  I can even let them have access to things as I'm working on them so they can comment.

oDesk services are well worth the 10%.

you dont need any

you dont need any screenshots or guaranties once you've estabilished longterm realtionships. so, where is role of odesk in such situation? just convient place. but does it costs 10%? anyway - each have to answer on that question on their own..

So you're saying

Pavel K. wrote:

you dont need any screenshots or guaranties once you've estabilished longterm realtionships. so, where is role of odesk in such situation? just convient place. but does it costs 10%? anyway - each have to answer on that question on their own..

The Buyer doesn't need oDesk is that it? I think you're wrong! I've hired a few people from oDesk and I personally PREFER knowing what I'm paying for - I know that I'm not getting billed for hours that someone is scouring the web, responding to statements in a forum, posting to their own personal blog (and other 'infractions).  From a buyers perspective personally oDesk offers me MORE than enough to justify the 10% fee. 

if  you are afraid of those

if  you are afraid of those "billed hours for surfing, forums, chats and etc" than that is not a longterm relationship. there odesk is needed for sure. but when you are confident in freelancer? =)

Personally

Pavel K. wrote:

if  you are afraid of those "billed hours for surfing, forums, chats and etc" than that is not a longterm relationship. there odesk is needed for sure. but when you are confident in freelancer? =)

As I clearly stated before - I'm a buyer and provider. As  a provider I like the security oDesk provides me in terms of payment. As a buyer I like the fact that my providers have no concerns with my paying them either. In the UNLIKELY event that I have a problem with a provider then at least I have options - unlike what you're discussing.

If you're here to find buyers who are willing to work outside the system you'll find them I'm certain - as a provider why you'd do that I don't know - as a buyer if you're interested in paying when you feel like it then I guess that's an option too.

For those of us who have built long term relationships on oDesk we have our own reasons for staying here.

So since you know nothing about oDesk, it's buyers or it's providers then perhaps you should just clearly come out and say that you have no intention of working in the system that is in place because you think you know better than those of us who have been here and do work in the  system - then your account can be deleted and you can be banned for violation of TOS.
 

in response to Doreen

 

So since you know nothing about oDesk, it's buyers or it's providers then perhaps you should just clearly come out and say that you have no intention of working in the system that is in place because you think you know better than those of us who have been here and do work in the  system - then your account can be deleted and you can be banned for violation of TOS.
 

[/quote]

I find the above post most offensive, although I'm not a member of Odesk long myself I do feel that each member has the right to voice their opinions without this resulting in abusive behaviour. I do understand that you have been quite sucessful on Odesk, and have seen your posts on a number of threads throughout the forums over the past few months, however I find it quite disturbing that you cannot allow others to have their own opinions without being quite rude in return. I am sure that the original poster did not intend to insult anyone as his post was written in a very friendly manner.

I wasn't trying

Jo Buckley wrote:

 

So since you know nothing about oDesk, it's buyers or it's providers then perhaps you should just clearly come out and say that you have no intention of working in the system that is in place because you think you know better than those of us who have been here and do work in the  system - then your account can be deleted and you can be banned for violation of TOS.
 

I find the above post most offensive, although I'm not a member of Odesk long myself I do feel that each member has the right to voice their opinions without this resulting in abusive behaviour. I do understand that you have been quite sucessful on Odesk, and have seen your posts on a number of threads throughout the forums over the past few months, however I find it quite disturbing that you cannot allow others to have their own opinions without being quite rude in return. I am sure that the original poster did not intend to insult anyone as his post was written in a very friendly manner.

[/quote]

I'm sorry that you find my post offensive. I believe he is entitled to an opinion - about things he knows something about but to have this discussion about oDesks value with someone who knows nothing about oDesk is offensive to me.  This person is basically saying that oDesk has no value past the 'original' making of contact. I strongly disagree.

If I was offensive then I'm sorry but why would you feel its appropriate for someone who has not worked one hour on oDesk to make these types of references to 'let's use oDesk to set up a relationship then go away' Read the context of his messages - that's what he's saying. 

long term + large team = temptation

As a business owner myself I am aware of trying to control costs. If I had a team of, say, 5 developers that I have worked with satisfactorily over a year or so, then saving 5% of my development bill is worth considering. I would offer to pay the developers 5% more for working outside the system. They gain 5%, I reduce by 5%, all happy. I would have to do without the oTeam system, but could compensate for that with developers who want to keep their relationship with me.

From oDesk's point of view that would be a bad thing, so I am suggesting a way they could reduce its likelihood of happening.

Just because I haven't been here long does not mean I know nothing about business or how people behave, nor does it mean I cannot grasp the values of oDesk. This is where I want to make a living from now on and so its in my own interest to contribute ideas that I think will help oDesk to prosper. 

I guess I fail to

Danny S. wrote:

As a business owner myself I am aware of trying to control costs. If I had a team of, say, 5 developers that I have worked with satisfactorily over a year or so, then saving 5% of my development bill is worth considering. I would offer to pay the developers 5% more for working outside the system. They gain 5%, I reduce by 5%, all happy. I would have to do without the oTeam system, but could compensate for that with developers who want to keep their relationship with me.

From oDesk's point of view that would be a bad thing, so I am suggesting a way they could reduce its likelihood of happening.

Just because I haven't been here long does not mean I know nothing about business or how people behave, nor does it mean I cannot grasp the values of oDesk. This is where I want to make a living from now on and so its in my own interest to contribute ideas that I think will help oDesk to prosper. 

As a business owner myself, I think that the 10% is money well spent (a) no paperwork (b) no need to worry about billing (c) no tax filings at year end.

I think the 10% is more than worth it (especially as you point out that it's reduced from 30%).

I guess I fail to see the value in going outside the system - it saves me far too much grief and if I do in fact have a problem with a provider there's a pool of available people to choose from!

Good luck and I wish you every success on oDesk!

Consider a business running

Consider a business running 5 long term oDesk providers. A team leader at about $80 per hour and 4 juniors at $40 per hour. Say they work for about 1000 hours a year each. That's $240k + oDesk's $24k.

With the scenario of splitting the difference with the providers the business looks to save $12k a year.

oDesks systems are helpful and I would prefer to run with them but I think buyers might go out of their way for that $12k. All I'm suggesting is that the fee reduces for those cases where the relationship has grown enough to make such a jump tempting.

Maybe it only has to drop to 8% or 5% to have that effect, I don't know, but I do know of many real life business deals that fall through over a disagreement of only 1%. 

guys above gave out full

guys above gave out full answer. and i am with them.

You may be mistaken, Doreen

Doreen, it appears to me that the Provider, pkorovkin, whom you trashed, is actually a highly-ranked provider here at oDesk, in the 99th percentile based on 15 feedbacks.  It is true that he has worked here a shorter time than you, but the fact that he has completed numerous projects with 5-star feedback and enthusiastic comments from his buyers disproves your comment that he "knows nothing about oDesk, it's buyers or it's providers" and makes your assertion that he has "no intention of working in the system that is in place" seem silly.  I could be wrong-- I rarely take the time to look at any provider's profile-- but you could check for yourself...

 

 

No the person

Nicole V. wrote:

Doreen, it appears to me that the Provider, pkorovkin, whom you trashed, is actually a highly-ranked provider here at oDesk, in the 99th percentile based on 15 feedbacks.  It is true that he has worked here a shorter time than you, but the fact that he has completed numerous projects with 5-star feedback and enthusiastic comments from his buyers disproves your comment that he "knows nothing about oDesk, it's buyers or it's providers" and makes your assertion that he has "no intention of working in the system that is in place" seem silly.  I could be wrong-- I rarely take the time to look at any provider's profile-- but you could check for yourself...

 

 

I was addressing was http://www.odesk.com/users/Creative-Java-WebApp-Developer_~~c9bd50fc747ef466

Brand new oDesk user. 

No the person

Doreen Martel wrote:

Nicole V. wrote:

Doreen, it appears to me that the Provider, pkorovkin, whom you trashed, is actually a highly-ranked provider here at oDesk, in the 99th percentile based on 15 feedbacks.  It is true that he has worked here a shorter time than you, but the fact that he has completed numerous projects with 5-star feedback and enthusiastic comments from his buyers disproves your comment that he "knows nothing about oDesk, it's buyers or it's providers" and makes your assertion that he has "no intention of working in the system that is in place" seem silly.  I could be wrong-- I rarely take the time to look at any provider's profile-- but you could check for yourself...

 

 

I was addressing was http://www.odesk.com/users/Creative-Java-WebApp-Developer_~~c9bd50fc747ef466

Brand new oDesk user. I accidentally quoted the wrong person :)  Apologies for that - and again, I wasn't trashing anyone I was just making the point that I can't see the value of going outside oDesk.

OK! I agree that oDesk is a good value

OK, I understand what happened.  For the record, I agree with you that oDesk provides a good service for its 10% cut.  It lets me spend most of my work time doing actual development work, instead of writing status reports (constant memo reminder takes care of that) invoicing (oDesk does that), reminding/dunning for late/missing payments (never happens with oDesk) and going to the bank (oDesk deposits my pay every week).