Thursday, February 7, 2008

Job Bidding, Yay or Nay?

If you own a small company and have hired a freelancer to complete a job for you, you may have found them on one of the job bidding sites.

If you are a small design company, writer or search engine marketing specialist you may have found work through one of these sites.

If you've never heard of them and want to know more information, read on and I’ll tell you my experience with them.

The job-bidding site is similar to EBay but in the reverse, instead of the prize going to the highest bidder, the job is usually awarded to the lowest bidder.

While the concept can be good for people who need professional services and don’t have the budget or know-how to do the job themselves, for the professional it can be costly and ultimately detrimental to your business to engage in bidding for jobs.

There are several factors for both parties to consider:

For the consumer:

Hidden fees
You may be paying for services that you don’t need to. Check the fine print in the terms of agreement before signing up and posting a job. Are they charging you a fee as well as the service provider? You can find a place to post your job for free (such as Craigslist), opt for one of those services instead.

Loss of funds
Some freelancers require the money up front for the work to be performed. You can end up unknowingly hiring someone that won’t complete your project on time and won’t refund your money. You don’t know who you are dealing with, as you aren’t allowed to contact the freelancers directly before committing to work with them. You should be able to run a Google search on the company before hiring them to make sure they aren’t going to rip you off.

False sense of security based on reviews
Many of these sites work on a review basis where the service provider will have many positive reviews that just aren’t real. When hiring a freelancer or service provider, have them give you solid contacts that you can speak to directly in order to find out if they are in fact trustworthy.

Fake portfolios
Since the portfolios only have images of design work, how can you be sure that they actually completed the work? Ask to see working examples of their portfolio that are live on the Internet and not just pictures.

For the Service Provider:

Bidding too low
Many offshore companies can complete the same work as the designer/writer/specialist at a fraction of the cost. In addition to the obvious reasons why they can, they aren’t subject to the same insurance and taxes we have in America, and as a result they can bid relatively low on a project. You’ll have to lower your price to an unrealistic figure that won’t cover your hourly rate in order to compete.

A Percentage of the Job
Often the bidding website will require you to pay a fee or they take a percentage of the job price. If you have bid on the job at a lower rate than you normally would to try and compete with other companies, you may now be losing money once the fee is deducted from your payment from the client. Some of the sites charge as much as 20%.

Paying per Bid
You may have to pay for each of the jobs you bid on. A few of the sites require that you purchase credits in order to bid on a job. We tried that approach, we purchased 5 credits for the lead ($25.00), spent time on a proposal and the client never responded to our phone calls or emails. Incidentally, 8 other companies such as ours bid on the exact same job, thus netting the bidding site $200.00.

In my opinion, it’s a risky thing – however, we have garnered a few great clients from it. As a small firm, we’ve done our share of bidding on freelancer sites and only been hired occasionally due to being underbid beyond what would be a fair rate for us to provide our services. How do we do it? When we have spare time (such as while waiting on hold for a client) we will peruse the bidding websites. We don’t underbid just to compete and we don’t pay for bogus leads.

Please feel free to comment and let me know if you have had a good or bad experience using these types of websites.



eamon said...


I like your blog a lot and i think it is relevant to mine. Would you be interested in exchaning links (mine is on advertising and media).


Complete Business Systems said...

Hi Eamon,

I checked out your blog and it has some good material.

Thanks for commenting and I'll contact you regarding a possible link exchange.

Eamon said...

Hi Joanne, added you to my blog (