When we created Developer Connection one of the first things we decided was that it was important to be completely upfront and transparent about any costs to using the platform. There are no hidden fees, no additional fees, and the small amount you do pay is clearly stated and visible before you pay it. This compares to other platforms where there are a range of fees which are often percentages, often none of which are quick or easy to decipher at the time of purchase. In this post, we are only looking at cost, but you can also see our full service comparison. Our costs are simple and clear - a one-off cost for posting a project of any size for clients and the chance to buy more matches if needed, and a small monthly subscription fee for developers - and that's it. Nothing hidden, no percentages and you pay nothing more to Developer Connection when work starts on a project.
So how does our simple, clear pricing stack up against Upwork? We took a random, sizeable selection of projects, posts and clients and analysed:
- Average clients spend per project
- Average hourly rate charged
- Cost to land a job with connection spend
- How much Upwork make
The sample of projects was not selective so we didn't take just the projects which would skew the numbers in our favour, we looked at 15 random projects, ones which were both recently posted and historical which had already been completed. The only exception we did make was to include projects only looking at clients who were in some way established i.e. they had at least a few projects they had paid for.
The findings were not too surprising, a definite push towards rock bottom prices, with all projects that were current and more than a few hours old having huge numbers of proposals. In the project title and description it was not uncommon to see detail stating that basically the lowest price bidder would win the job, for instance:
"The budget is fixed, lf you bid on this project DON'T ask for more money. So if the budget is too low for you, PLEASE DO NOT BID!"
We'll let that speak for itself, but it does give an overall impression of where these projects sit in the market. So what about the numbers? Here's what we found:
Average spend by clients per project: $620.98
Average developer hourly rate earned: $17.20
Average number of connects per proposal: 3.2
As expected the hourly rate is extremely low for any quality experienced dev, under £14.00p/h! and the average project spend suggests only small, low priced projects. We also did some general research to see what the consensus was on the average number of projects people have to apply to before landing one. There was some discussion that for many people you basically just never land a project (!) which we will ignore for the sake of this post, but there was also discussion suggesting that around 90% of proposals resulted in no work meaning that:
Average number of proposals before landing a project: 10
So with this data we can do some calculations to show the true cost both to clients and developers of using Upwork for Magento projects in the UK:
Average 10 project proposals per dev: 3.2 * 10 = 32 connects * $0.15 = $4.80
So it costs you nearly £4 to land a short term project and that's before any work starts.
In terms of Upwork fees with an average project cost of $620.98:
$500 / 1.2 = $416.67 (20% dev fee for first $500)
$120.98 / 1.1 = $109.98 (10% dev fee for the rest)
$620.98 - ($416.67 + $109.98) = $94.33 made by Upwork
($94.33 / $620.98) * 100 = 15.19% made by Upwork
15.19% + 3% processing fee on payments for clients = 18.19%
So Upwork keep an average of 18.19% + £4 of you hard earned cash as both developer and client for every single project completed which is £95.53 of a £503.20 project. I've got to admit, even we were surprised at how high this was! With the combination of connects, developer percentage fee and client percentage fee on payments, it's really hard to understand just how much Upwork make from each project until you see the numbers layed out like this.
For us paying a flat cost per project post, or a small monthly subscription really is a no brainer when compared to throwing away over 18% of your project budget to a third party. So if you aren't already, subscribe or create your project today, keep your hard earned cash and be part of something great!