Elance: Not for Beginning Freelancers

Elance is a fascinating, half-eBay, half-classified ads job site. In the Elance Marketplace, service "providers" are linked to job "buyers" through a basic message board-like interface, which allows buyers to post projects and for providers to browse the same projects and bid to get the job.

There are various freelancing categories on Elance, including Writing and Translation, Programming and Software Development, Logos, Graphic Design, and Illustration, Website Design, Business Design, and "Other".

Buyers post projects--for free--and providers browse the various projects. Providers then describe why they are the best person for the job, often attaching samples of previous work, and then bid on the job, describing how long the job will take as well.

Then the buyer decides.

Providers can create a basic profile about themselves or their business, and create a Portfolio of past client work, so that potential clients can view their work on Elance and elsewhere.

While posting projects is free for Elance buyers, for providers there is a membership fee. While the least expensive option is only $11 per month, for instance, for a "Limited" membership, many Elance buyers refuse to work with "Limited" providers, choosing "Select" providers only. A Select provider membership starts at $69 per month, although an annual membership runs $349. For this fee Select providers can bid on "sealed" bid projects (Limited and Professional members cannot); in many cases, the most lucrative projects are posted as Select projects. In essence, going for the lower-cost option on Elance will limit your ability to retain the best clients.

Since 2004 I have earned more than $80,000 as a result of Elance. While technically I have earned $15,400 according to my Elance profile, I've picked up clients on Elance who have then turned into non-Elance clients. In one case, I went from 10 hours per week as a writer for one client's website to working 40+ hours per week for them for eight months. In other cases, I picked up long-term website writing, SEO writing, and user interface testing projects.

Elance not only charges a membership fee, they also charge anywhere from 6.75% to 8.75% of the project total to the provider. In other words, if you win a $200 project, $13.50 to $17.50 goes straight to Elance. There is a minimum $10 fee as well, so smaller projects, such as a $50 article, will be charged a $10 fee off the top.

Like eBay, buyers and providers provide feedback for each other. Elance rates on a 1 to 5 scale. I currently hold a 5.0 rating, and many buyers will only work with providers with a 4.8 to 5.0 rating. Performing quality work is key to maintaining a high rating.

Elance works well for writers, website designers, and software and business consultants who have a reasonable amount of work under their belt, and who can build a strong portfolio to gain clients. A complete beginner to freelance writing, for instance, will struggle to find clients on Elance. Most buyers want to see some work samples before considering a provider.

At the same time, in some categories the prices for projects are very low. Keyword articles, for instance, are often priced at $2-$4 per article for a batch of 100 articles. Even a well-seasoned professional takes 10-12 minutes to write a 400 qord keyword article; between writing, saving, uploading, and client communications, at best a $2 per article rate would yiled $9-$10 per hour for the work, pretax.

Providers from Romania, India, and Pakistan have flooded Elance, and can often underbid U.S. and Canadia providers because of cost of living differences. On the other hand, some buyers refuse to work with non-U.S. providers for various reasons. When looking at project bids, keep this phenomenon in mind.

I recently picked up a ghostwriting book project for over $3,000 on Elance; the project will keep me busy for part of the summer, and it's a topic I already enjoy. This is work I could never have found without Elance. The buyer is located in a different part of the country, and even through professional contacts I could never have connected with him to perform this fascinating (and remunerative) Elance work.

Elance is an excellent tool for freelancers, but I wouldn't recommend it for complete beginners. Use it as a second step after making sales to Associated Content or Constant Content, and keep in mind that the competition can be brutal. Bid fair rates, do quality work, and get your completed project done before the official deadline to keep a high buyer rating, and Elance will work well for you.