Fees and Long Term Relationships
Danny S. 17 posts - Australia
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
After a Buyer and Provider have successfully conducted business together the first time then value 1) disappears from that relationship.
Once a Provider has worked for a Buyer for about 6 months worth of full time work value 2) probably diminishes.
Value 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.
Score: 7.0, Votes: 3