A Look at Freelance Exchange Websites

A freelance job site is a virtual marketplace where buyers and sellers from

around the world come together to do business.

How ItWorks

A buyer who needs a project to be completed registers with the website and

posts his requirements. He may also give details of the project such as maximum

budget and the time frame in which it has to be completed.

Freelance writers also have to register with the website. Whenever a project

is posted, freelancers bid on it and the buyer selects one or more freelancers based

on his requirements. After a buyer starts receiving bids, he'll review the terms

submitted and also the qualifications of the bidders. From there, he's usually able to

select a winning bidder. The writer who is awarded the bid then has a certain length

of time to complete the project. Once the buyer is satisfied with the work, the writer

gets paid.

Big Freelance Websites

1. Elance.com

2. Guru.com

3. Rentacoder.com

4. Odesk.com

5. GetaFreelancer.com

6. Getacoder.com

These freelance websites charge either a fee or they take a small percentage

from the writer’s fees for the services they provide.

The Escrow System

Freelance exchange websites have an escrow payment system to ensure that

all financial transactions take place smoothly. It completely takes away the

headache of payments. You don’t need to follow up with your clients and ask them

to release your payments nor do you have to worry about fraud.

An escrow account is an account maintained by an impartial third party. The

sites that incorporate escrow accounts require buyers to deposit funds equivalent to

the amount they've agreed to pay the successful bidder into this account before the

project is allowed to begin.

The writer should never begin work on a project until funds have been

escrowed. Upon a buyer's acceptance of the completed work, the agreed upon funds

are released to the writer and the project is officially complete.

With the escrow payment system, there is no question that you will not be

paid for your services. The only delay you might experience is when a buyer takes a

long time to accept the project (due to some problems he may be experiencing or

further modifications on the project). However, such cases are rare.

An escrow system makes sure you will be paid on time and protects you

fromscams. A buyer depositsmoney with the freelance exchange

website before you start work.

Advantages of FreelanceWebsites

Joining a freelance exchange website is a smart move. Here are reasons why:

1. It's an easy way to find work: Most offline freelancers struggle to get a

decent paying project. Turning on the computer and bidding on various projects is

much easier than cold calling or giving away cards individually to potential clients.

Your prospects are sitting right under your nose! Once you get the hang of how

these websites function, you would be bidding and winning projects in record time!

2. You can build reputation: Another good feature of these websites is that

they allow you to build your reputation. Every time you finish a project, buyers

usually leave a testimonial on your profile page on these websites. Getting good

feedback jump starts a viral loop. (Have you heard of the “Success attracts

Success” quote?) Other buyers, while evaluating bids, often read past testimonials

of a writer before awarding a bid.

3. Low cost: Finally, joining freelance exchange websites is possibly the

cheapest and surest way of getting work. Apart from the membership fees or

commissions these websites charge and your Internet and electricity bill, there are

no practically no overheads.

Freelance websites are the easiest way to get new writing work and

build a reputation. Anyone can start fromanywhere.

Fees Explained

Although they may operate differently, the one thing that most freelance job

sites have in common is their fees. The fees can range from:

• a flat rate of a few dollars paid monthly or yearly

• a percentage of the amount you bid

You would find many freelancer writers (who are not making a bunch of

money) complaining on forums and message boards about the fees of these

websites. Without a shadow of doubt, you can easily assume they failed to put value

on their time.

According to the National Writer’s Union, freelance writers who specialize

in writing magazine articles only sell an average of 3,000 to 4,000 words a month.

Writers spend a colossal amount of time researching and pitching articles. To

calculate how much you would earn at this rate, multiply your expected rate per

word. Many freelancers remark that the going rate is $1 per word, but the reality is

that it’s much less.

The fees that you pay to freelance exchange websites can be looked upon as:

Finding Fees

Looking and getting new work is not cheap and this becomes only evident

once a freelancer goes out there and looks for writing assignments. Let’s take an

example: Suppose you have an hourly rate of $20. (Writers charge $10 to $80 per

hour on most freelance websites and with experience many also charge up to $250

an hour). If you go out there looking for work, you could easily expect an average

of 10 hours of your time to get an assignment. (This is a lower estimate. Put the

time you require to get finally paid it’s much more. )

What was the cost of finding work? 10 *20 = $200! Freelance exchange

websites charge you a fraction of the cost.

Bookkeeping Fees

Another time buster of writers is their concern of getting paid in time and

worse not getting paid at all. A client often does not release payments on time and

you have to keep on following with them to release it. And what if the client never

pays you? Or what if you do get paid but the check bounces.

When you stop and think of all the services that freelance job sites handle for

you, you realize the fee you pay is justifiable and it's fair. And it's probably less than

what you'd end up paying for all your marketing, advertising, customer service and

bill collecting efforts.

Arbitration Process

Another good feature of freelance exchange websites is the arbitration

process. Sometimes, a dispute can arise such as a project being completed late, not

completed or not being in agreement as to what the two parties initially decided.

In arbitration, a neutral third party looks at the dispute. Based on the

information, the arbitrator makes a fair decision. The arbitrator's decision is final

and the parties involved must accept the decision and take whatever action the

arbitrator deems necessary.

Not all freelance job sites offer an arbitration process. On those that do,

arbitration should be used only as a last resort because, depending on the situation,

it can help you or hurt you. Regardless of the outcome, there will likely be a record

of the arbitration and it will be viewable.

How to Choose Freelance Exchange Websites

There are many freelance exchange websites you can choose from. Here are

a few tips to get started.

• Judge it by its cover

Look for a professional website. Do they have a trust building factor?

• Membership size

If a website provides a good service, buyers and writers will often re-visit

the site resulting in the community growing bigger and bigger.

• Contact address

This is an absolute must. If a company does not give a contact address,

don’t trust them.

• Read the website’s terms of service, company policy and payment

terms

When you evaluate websites, your primary concern should be to check

whether you will be paid on time. Not every site offers an escrow facility.

Another point to look out are the terms and condition of the website in

case of arbitration.

Read FAQ

The FAQ’s of the website will give you the details of the website.

• Do a Background Check

Make use of search engines to find what others are commenting about the

company.

Big Freelance websites have a lot of work posted on thembut you will

also face competition fromother writers. Smaller ones have less

competition as well as less work.

How to Avoid Scams

The Internet is a great place to make money, but it’s also a great place to get

scammed! Many people take advantage of the anonymity the Internet provides in

order to make a quick buck. I personally have never been scammed because I

always operate on certain ground rules. Here they are...

• Only work with reputable companies: Doing business with new

companies is adventurous and risky. You don’t know what to expect. If

you want to be sure what to expect, find the reputable businesses and

initially stick with them.

• Avoid the hyped up sites: If you come across a page that boldly punches

you in the face with the headline “Earn $10,000 per month working only

3 hours a day” then there are two possibilities. Either an angel has

answered your prayer or a scammer sits gleefully behind it. I always

prefer to visualize the scammer. Angels have come in my life in other

forms!

• Check their Alexa rankings: Recently, I came across a website that

claimed to provide work to thousands of freelancers. I was skeptical since

I had never heard of it. In this case, I checked its Alexa ranking. Alexa is

a free tool that ranks website traffic from the data it collects. It gives you

a good estimate how many people visit the website. You can access it at

www.alexa.com

Above is a traffic graph comparing Elance.com and Rentacoder.com, two

very popular freelance exchange websites. If you see no graph for a website you can

be sure that very few visit it.

• Before doing business, do background checks. Forums are a great

way to do a background check. Either ask someone for feedback or

browse through the past message archives. Another good way is to

make use of search engines to research information. The internet is

democratic in this way. In your favorite search engine, type the

following:

• Company name + forum

• Company name + scam

• Company Name + unfair

• Company name + sucks (Well, somebody might have

posted an opinion on his blog)

• Company name + fraud

Here are the results for the search term freelance writing scam. Somebody’s

not happy. Ouch!

If you work on reputable freelance websites, scams should not be an issue. If

you decide to work for an unknown website or company, suspect a scam when:

• You have to sign up for a training packet or start-up materials at your

own expense before working for them They ask for your social security number before they've even hired you.

• A hyped up sales letter with lots of exclamation points (e.g., “Easy
  

Money!!!)

• You have to do an unpaid “trial” assignment. This is particularly common

in the writing world. It's an easy way to get free content without ever

hiring a writer.

Always do a background check of a company before working with

freelance exchange websites.