Why is Freelancing on Upwork and Freelancer so Terrible?

In this digital age, freelancing has emerged as a popular way for individuals to leverage their skills and talents to earn a living as a side hustle. Platforms like Upwork and Freelancer have gained significant prominence in connecting freelancers with clients from around the world.

However, beneath the surface allure, there are several reasons why freelancing on Upwork and Freelancer can be a less-than-ideal choice for many professionals. Drawing from personal experiences as a freelance writer for 3 years and industry insights, I would consider freelancing for beginners on Upwork and Freelancer to be a challenging endeavor.

The Promise vs. The Reality

When individuals first explore freelancing on Upwork and Freelancer, they are often enticed by the promise of flexibility, a broad client base, and potential earnings.

Who doesn’t want to make an income anywhere in the world with just their laptop?

Well, that’s how freelancing is often depicted. However, the reality can be quite different.

Misleading Expectations

The myth of “get-rich-quick” often lures newcomers. Many anticipate a constant influx of high-paying gigs, but competition is fierce, and success takes time and effort.

The reality is that online clients will never pay as well as direct clients. Businesses know that paying freelancers means cheaper costs and flexible working hours.

Surely that would mean more clients to work with right?

That’s far from the truth. Freelancers are often forced to work even longer hours while being paid less as compared to full-time employees and having no employee benefit to protect any of their business downsides.

Oversaturated Markets

Upwork and Freelancer have millions of freelancers from across the globe. This fierce competition can make it exceedingly difficult for new freelancers to secure their first projects.

I cannot understate how competitive it is to offer your service on a freelancing platform. Chances are, you are going to go against a barrage of lowballers and even cheap service providers that undercut your services to get clients.

Apart from competing against the lowballers, you’re sandwiched between the seasoned freelancers of the platform. These freelancers make the bulk of their income from the freelance platform. Freelancers such as Alex Fasulo makes over 7 figure now in 2022 and has been growing as the online space evolve.

While you could wait for the best possible client out there, lowballers are making money and seasoned freelancers are taking the majority of well-paying clients. Therefore, your expectations of getting clients need to be a lot lower to compete in the freelance economy.

Low-Paying Jobs

While high-paying opportunities exist, they are often scarce. Many clients on these platforms seek low-cost labor, resulting in a race to the bottom in terms of pricing.

Here’s what people think of freelancers:

A developing countries way of finding scraps from the Internet

It’s crazy to think that there are some freelancers willing to take low-income jobs and try to survive at the same time. It’s not sustainable and therefore some freelancers often get a bad misunderstanding of how to actually earn money doing freelancing.

Another reason not heavily emphasized is freelancers will never be able to negotiate for better pricing. You are always at the mercy of another freelancer who is willing to work for less.

Freelancer Fees and Commissions

Don’t you just hate to pay fees and having to lose a cut of your hard work?

Over the last few years, the fees with many of these freelancing platforms have even increased so far as to take 20% for every job completed.

UpWork stated that their business incurs significant costs for things like website upkeep and customer service. In order to maintain the business, they also need to turn a profit. These all play a part in the hefty costs that Upwork charges.

High Platform Fees

To remain competitive with other freelance platforms, Upwork and Freelancer have a tier system to reward freelancers who have been working with the platform. The higher your profile is when it comes to delivering quality work, these platforms often will reward you and boost your service to more people.

These platforms charge substantial fees for each project, often taking a significant chunk of a freelancer’s earnings.

Escalating Commissions

As freelancers build their careers and start earning more, the commission percentages also increase, further impacting their income. Thereby, the more you earn, the better they earn but for the same amount of work they provide.

Freelancers on the Medium writing platform have also shared their concerns and annoyance for having to pay fees that simply don’t justify their pricing.

Over time, freelancers who spend the time to know their clients better would be better off requesting them to pay through their own bank account or business website. This way, they can earn more income while avoiding the high commission rate from freelance platforms.

Lack of Job Security

Freelancing on Upwork and Freelancer comes with a level of uncertainty that traditional employment doesn’t have. Many of these buyers are not here for the long term. Instead, they are looking for short-term answers that freelancers are able to provide.

Inconsistent Income

That’s why Freelancers often struggle with unpredictable income, making it challenging to budget and plan for the future. It’s worse than starting a business since freelance doesn’t have a strong reputable brand to hold them.

Over the last few market cycles, freelance platforms have noticed that their platform tend to do better during a recession.

Job Instability

Clients can terminate contracts at any time, leaving freelancers without work or income.

Experience freelancers know that the most important trait to maintain a good income is to constantly find clients and continue to serve them. While that means more stable income, it also means more work on your end.

No Benefits

One key reason why freelancing isn’t a good idea which is often overlooked is not having any benefits of being a full-time employee. They don’t enjoy the benefits and security such as:

• Health insurance
• Retirement plans
• Paid medical leave
• Off days
• Paid office equipment

Quality vs. Quantity Dilemma

To thrive on these platforms, freelancers often face a tough decision.

Balancing Quantity

To secure a steady income, freelancers might need to take on multiple low-paying projects, sacrificing quality for quantity. Although this might hurt your reputation as a freelancer, it still does put money in your pocket and simply just need to do the bare minimum to get clients.

Quality Sacrifices

Focusing on quantity can lead to burnout and compromise the quality of work delivered to clients. However, when it comes to freelancing, there is never a customer who is willing to work with you for the long term.

Alternative Freelancing Options

While Upwork and Freelancer are well-known, there are alternatives that offer a more favorable experience. I highly many freelancers to start thinking like an entrepreneur.

Being an entrepreneur does shift your mentality from a self-employed to a business owner. By understanding how to start thinking like an entrepreneur, you will understand how businesses work and learn how to get clients lining up for you.

I highly recommend the book called “Oversubscribed” which you can check out below. If you would like to know more about the writer and how he helps people develop and strong business mindset, I highly recommend you to check out the podcast below.

Are you ready to take up the challenge of freelancing?

Freelancing on Upwork and Freelancer can be a challenging endeavor due to the fierce competition, high fees, and unpredictable nature of the work. While these platforms can be a stepping stone for some, it’s essential to carefully evaluate whether they align with your career goals and expectations.

Ultimately, success in the freelancing world requires patience, perseverance, and a strategic approach to navigate the challenges and reap the rewards.

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