A freelancer has to be creative in how he or she finds clients in an ever-growing marketplace on the internet. With layoffs and corporate downsizing, more people are seeking to supplement their income freelancing or even leaving their corporate jobs to become self-employed. Freelance bidding sites allow freelancers to find clients, especially when first starting out freelancing, before a client base is established.
How Freelance Bidding Sites Work
The way bidding sites work is similar to an auction. A buyer posts a job they need done, with the specifications required to finish the job, and then potential contractors bid on the project with their best price, the specifications they’ll use to perform the work, and the expected turnaround time for completing the project.
The Bidding Process
The bidding process at a freelance bidding site can be open or sealed bidding. It usually is up to the buyer whether bidding is open or sealed.
Open Bidding – With open bidding, all the competitors bidding on the project can see the other competitors' bids. Some bidders will watch a few other freelance contractors place their bids first and see what they offer. If the other freelancers are bidding low or high, it can help determine the expected average bid.
Sealed Bidding – With sealed bidding, the provider names of those who have bid are open to the public, but the actual specifications and the amount of the bid are sealed so only the buyer can see them.
After the freelance contractor reviews the project and decides to bid on it, the next step is to determine what services the contractor will provide and how much to charge the buyer. The contractor then enters the amount and the time it will take to complete the project.
The Selection Process
The buyer can choose to close the freelancing bidding auction early, so while it might help to wait to see what other service providers charge, waiting too long can cause the buyer to close the project and award it to another bidder before the contractor completes a bid. The buyer chooses either to select a provider when the auction closes or before the auction closes. The buyer will read through each of the bid proposals and determine which one best fits the project's needs and budget.
It’s important to note that the lowest bid isn’t always the one the buyer chooses. The buyers will determine who is awarded the project based on many factors, including: the service provider’s history and feedback on the freelance bidding site, the provider’s experience and/or education, the cost of the project, the turnaround time for the project, and other factors that will vary from buyer to buyer.
The Awarding Process
Different freelance bidding sites work differently, so it is important to read the guidelines and instructions to learn how each site handles the financial aspect of the bidding auction.
Some sites have several payment options, including escrow accounts. With an escrow account, the buyer puts the money for the project into an account held by the freelance bidding site. This escrow funding shows good faith to help the provider feel more secure in knowing the buyer intends to pay for the project and has the money to do so. Escrow accounts also help the buyer ensure the work is performed by the provider before handing over any funds.
The buyer and provider determine how the money will change hands. Some providers require payment in advance or at least a deposit before work is started, while some buyers refuse to pay any money upfront until they see some work. Milestone payments can be agreed upon beforehand, so that portions of work are paid for as they are completed.
Ending the Project
The project ends when either both parties agree to end the project or when one party decides to terminate with cause or justification, usually when one party fails to keep their agreed upon terms. Otherwise, the project ends when the provider completes the work and the buyer pays the provider.
Rating and Feedback
When the project is completed, most freelance bidding sites have a rating and/or feedback process that allows the provider to rate the buyer and the buyer to rate the provider. The buyer can be rated on their ease to work with, whether they paid timely and as agreed upon and more. The service provider can be rated on their professionalism, the quality of their work, the timeliness of completing the work and more.
The ratings and feedback can help future buyers and service providers determine if they want to work with that buyer or that provider in the future.
Freelance bidding sites usually take a cut, or a finder’s fee, for the project that is a percentage of the total project’s value. Because of this, many freelancers use these bidding sites to help launch their freelancing business and build up some clientele and testimonials, then create a website of their own and work directly with clients, coming back to the freelance bidding site only when needing to pick up extra work between clients.
Some of the more popular freelance bidding sites include Elance.com and Guru.com.
Michelle L Devon - ~~Michelle Devon has 15 years of writing and over a decade of editorial experience, working with hundreds of publications and ...
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