There are a number of reasons the online marketplace has become a highly popular way for businesses of every size to recruit freelancers for specific projects. It is obviously a lot cheaper for businesses to recruit online as recruitment costs are small when compared to traditional methods of recruitment, and there are fewer legal obligations as well.
It is also easier for business to recruit online, as they can see examples of work, and they have a pool of people worldwide to choose from.
Another prominent reason is the internet makes money, and continues to make money for tens of thousands of people all over the world. Despite economic conditions, and possibly because of them, the demand for freelancers continues to rise in nearly every industry you can think of.
Providing you can utilise your skills and spot good opportunities you can develop your own online contractor business whereby you win and outsource work to freelancers for a profit.
The steps outlined in this article are designed to help you become established as a contractor, build your reputation, turn a healthy profit, and grow your business.
Understanding How The Online Contractor Marketplace Works
The online marketplace is simply a few websites where hundreds of companies and individuals post jobs and projects online, inviting freelance contractors to bid for the work.
Normally, a typical ad will include:
- Title: A good title will state what the job is and entails. For example: “Freelance web designer needed for blogging project”.
- Description: Here, the ad will go into more detail about the requirements of the job, and it is vital you pay attention to this. It can include deadlines, location requirements, information about the business, specific requirements needed from the freelancer, and anything the writer of the ad feels you should know.
- Budget: Normally, this is either an hourly rate or a fixed price for the whole project. Again, attention to detail is vital to avoid shocks.
The contractor, if interested, will bid for the job, outlining their skills and experience, price, and normally an example or two of previous work so the business can determine whether or not this particular freelancer is suitable for their project.
The business chooses a freelance contractor for the job. The contractor completes the work and the business pays the contractor, normally via an escrow system operated by the site that featured the ad.
To make money as an online contractor, you bid for the work for one price, and outsource to another freelancer for a cheaper price. Subsequently, you make a good return, and your popularity increases with your bank manager.
Here is a list of online marketplace sites. The list is not extensive, but the sites below are popular:
Note: All sites that feature project and job ads for online contractors charge a percentage of the final payment fee.
Step 1 – Identify Your Skill Set
As stated, businesses need to recruit people online for nearly every job role you can think of. Providing you can show some evidence that you can deliver the goods, many businesses will give you a go, providing they like what you show them and your price is within their budget.
So, take a piece of paper, and write down what you think you are good at. Your list may include:
- Customer service
- Data entry
- Office skills
If you have specialist experience, such as in web designing, your skill set may look something like this:
- Java Script
- MY SQL
Regardless of your skill set, there is no doubt that there is something you can apply for, even if it is your first experience of the online marketplace.
When you apply for your first few roles, try to apply for ones you feel you can do yourself, as should you be unable to find a suitable freelancer to outsource the work to, you can still complete the project yourself, get paid, and start building the all-important reputation.
If you find yourself in a unique position of being unable to identify skills, do not worry as the real skill in contracting is to identify profitable opportunities. As your experience grows, you will find yourself managing a team of people whose skills could be alien to you, yet through clever business dealings, you will utilise their skills to make you a healthy profit.
Step 2 – Identify Outsourcing Costs
Anyone who is connected to business will tell you the importance of identifying business costs. In virtual contracting, it is important you have a fairly certain idea on how much it will cost you to outsource the work you win. With this information, you can identify what jobs are profitable, and which jobs are to be avoided.
To that end, visiting Fiverr is a good place to start. Fiverr.com specialises in jobs that people are willing to do at a cost of $5. Despite the low cost, the range of skills and their associated complexity is impressive.
Start with your skill set and, looking at the freelance sites, try to ascertain how much people are bidding on certain jobs. Many of the sites give an average current bid cost before the job is closed and awarded to a freelancer. Make a note of the cost for a few similar jobs.
The other aspect of costs is that some roles require more than one type of freelancer. Web design projects will probably require a copywriter as well as a web designer at the very least.
The other aspect to costs is ads. Some sites will charge for placing an ad others will take a percentage of any transactions. A few do both. The bottom line is to work out your cost before you bid.
Step 3 – Bidding For Work
So now you have an idea of your skills and of how much it will cost to outsource the work, it is time to start looking for projects.
After you have created accounts on some or all of the sites listed above, you will see you can start looking for jobs that require the skills you identified in Step 1. If you are feeling confident or no skills came to mind in Step 1, take a look at a few featured jobs. Whichever kind of job you are applying for, make a note of the following:
- Requirements of the job: What skills does it require? What are the deadlines? Does it require any special requirements, such as country of residence requirements of the workforce? Is the job a one-off project or an ongoing role?
- The budget or cost per hour: Normally a maximum is stated.
Once you have this information, you can decide whether the job is within or outside of your budget as you are already aware of your costs. You may find the budget is borderline in which case you may want to go back to Step 2 to try and pinpoint costs.
Once you have identified a job, it is time to apply for it. When you submit your bid it is important to address the points in the brief to show you understand what’s needed, and it is also important you highlight the selling points of what you can do rather than the features.
So if you’re bidding for a graphic design job, saying you are “familiar with Adobe Photoshop” is OK; saying you have “designed brand artwork using Adobe Photoshop” is a billion times better.
A crucial factor is bidding, especially for contractors. A good method of pricing is simply to add a mark-up to costs and then a little extra to allow for mistakes in costs and bidding. It can not be overstated how it important it is that you do not make a loss.
When pricing, ask yourself how many people will you need to complete the project? As stated, a web design project will probably need a copywriter, and in some cases a graphic designer in addition to the web designer. These have to be factored in to the bidding process. If you need to, return to Step 2 to ensure you are savvy about your costs where the project is concerned.
Most online businesses do not make much profit from a single sale, but make their money through selling a lot of products or services. Amazon and eBay work to tiny mark-up percentages but make their money through shifting volume.
This could be a good method to follow and, with experience, costing a job will become second nature. If you can, always provide a good working example with your bid to show you can deliver the goods.
It is normal practice for the job owner to want to talk to you and this is a good opportunity for you to clarify exactly what is needed for the role. Do not be afraid to ask questions, especially if there is ambiguity on some aspects. Some of the briefs you will see can be very vague. Often the client is not always aware of what they want, and you may have to take the lead.
At the very least, agree a deadline, price, and a good idea of requirements. Most of the sites use an escrow system, and it is a good idea to use escrow to protect yourself from unscrupulous clients. Apply for as many jobs as you can.
Step 4 – Outsourcing
Once you’ve landed the role, spoken to the client, and agreed deadlines and requirements, it is time for you to outsource your project. In the first instance, see if the role can be covered by fiverr.com as this will keep your costs down. If it can’t, place an ad on one or all of the sites listed above.
When placing an ad, ensure you include:
- An accurate brief, including deadlines, requirements and terms
- How much you are willing to pay, obviously taking into account your mark-up
- Place ads for as many people as you need
Choosing Your Freelancers
Once you start to get applications for the various roles you post, you will probably see working examples they have completed in the past. Choosing the right freelancer will be a question of balancing their skills, cost, and your gut feeling about whether or not you think they are any good. Cost is arguably the most important factor for a virtual freelancer. Take your time and assemble your team (if more than one) carefully.
Once you have your team, you should speak to them and clarify requirements, deadlines (preferably a day or two before your deadline to allow for corrections) and payment terms. Ensure you agree corrections and support work if applicable, as often a client may require adjustments when the work is submitted. Once agreed, the work begins.
Step 5 – Submitting The Work To The Client
Once the work from your freelancers comes in, it is imperative that you check the work to ensure it is on-point. Do not be afraid to ask for corrections and most freelancers will expect to do a bit of tweaking. Once you are happy, submit the completed project to the client. It may be the case that corrections are needed, in which case ask the freelancer to revise their work.
Payments And Relationships
Once you have a few projects under your belt, providing they are a success, you will start to forge relationships with clients and contractors. It is important to establish trust as a good service provider as a virtual contractor, and a good provider of work to the people you outsource too.
All successful business is founded on trust and this is especially true for the online marketplace. Always ensure work is delivered on time and to a good quality, and ensure your contractors are paid in a timely fashion as agreed.
The virtual contractor world can be forged into a career. Like all businesses, taking advantages of opportunities and forging good relationships are key to success.