If you have ever done a freelancing job or hired a freelancer online, you must have used
or at least definitely heard about Upwork!
Founded in 2015 post the merger of freelancing companies Elance and oDesk, Upwork is an online
marketplace that connects freelancers with businesses that seek on-demand work.
Talking of the present, Upwork has over 145k+ core active clients with net revenue of over
$5.71Bn.
Net Revenue
As per Wikipedia, Upwork has 18 Million+ r egistered freelancers,
5 Million+ registered clients & over 3 million+ annual job listings making
it the largest freelancer marketplace in the world.
Upwork’s success has inspired many business owners & entrepreneurs to create their own
freelancer marketplace but before that, it’s really important to analyze Upwork’s Business
Model.
In this video, I’ll be covering :
How Does a Freelancer Marketplace Like Upwork Work?
What is Upwork’s Business Model?
How Upwork Makes Money?
And Lastly, How to Build a Freelancer Marketplace Like Upwork?
So stay tuned till the end.
How Upwork Works?
Basically, Upwork is an online marketplace that connects freelancers offering different
types of services to private consumers and businesses around the world.
As a freelancer, you can register your profile, upload your profile details like employment
history, skills, hourly rates, ratings & reviews by previous clients, etc.
Being on the client-side, you can post a job/role, mention the skills you require, choose the
candidates from Upwork’s matching algorithm, chat/call with the freelancers & get done
with the bidding part.
Once the bid is closed, both sides get access to Upwork’s workplace environment.
Using which they can send/receive files, share live feedbacks, and make hassle-free transactions
on the platform itself.
Now, let’s have a quick look at Upwork’s Business Model Canvas
Starting with Upwork’s Customer Segment that includes:
Entrepreneurs Freelancer Workers
Independent Professionals
Upwork’s Key Partners that are obviously: Freelancers &
Business Owners
Resources or Channels Required to Run an Online Marketplace are:
A Platform (i.e a Website & Mobile App) & a Global Billing & Payment System
Coming to What Value Propositions Does Upwork Offer.
For Freelancers: It offers them a platform to Find Online Jobs/Paid
Roles easily Showcase theirb skills & build a strong portfolio
Flexible Working Hours & a Reliable Feedback System
For Business Owners, Upwork offers: Access to choose from 18 Million+ Profiles
Find Services & Job-based roles in no-time & Make Safe & Secure Payments Online.
Talking about the Key Activities that include: Platform Maintenance
Customer Support Marketing
Networking & Community building
& lastly, factors making the Cost Structure of Upwork like freelancer marketplace are:
Platform Development & Maintenance Customer Support
Marketing & Advertising
Now, let’s talk about the Most Important part that is How Does Upwork Make Money?
Upwork generates revenue mainly from 2 resources that are:
Service Fees
Signing up & posting a job on Upwork is free.
This is to maintain the marketplace liquidity.
For running and maintaining such an extensive marketplace, Upwork charges a percentage fee
for every successful transaction.
It charges between 5 - 20% depending upon the total bill amount.
Moreover, as Upwork also takes care of the transaction process, it also charges a payment
processing and administration fee of 2.75 percent on every transaction.
According to Upwork’s latest report, 90% of the company’s revenue comes from the
service fees generated in the marketplace.
Subscription Plans
After charging service fees, Upwork generates revenue through different subscription plans.
The marketplace has 3 membership plans that offer different benefits for the business
owners.
These plans allow businesses to hire better candidates at a faster rate.
Upwork’s 10% of its total revenue comes through subscription plans & currently has
over 124K+ clients who have purchased these plans.
And Lastly, Upwork also charges Marketing & Advertising Fees from professionals who
want to promote themselves & business owners who want to hire faster.
So, this is all about How Does a Freelancer Marketplace Like Upwork Work & Make Money.
If you’re looking forward to building your own freelancer marketplace similar to the
likes of Upwork, Fiverr, or Freelancer.com, we have a perfect solution for you!