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A place to sell your talent
After learning to write potentially tradable code, all the newborn developers face an imminent question: how to sell your skills with a maximum profit? Some seek a stable salary, a convenient workplace, and regular bonuses. This type of prioritization leads them to office work. Others crave for self-made schedule, want to be responsible for their own time, and don’t dream of any corporate fringe benefits. These developers make the backbone of the freelance market.
For coders wishing to freelance, there are several working options. They either look for a job via word of mouth or register on online marketplace platforms and look for orders there. Below, we will elaborate on the different freelancing marketplaces types and their commission approaches. Our main accent will be on the commission: who should pay, and how much?
Bidding platforms strongly resemble traditional job boards. Clients post their job requirements and the budget — and developers place their bids on it. The one with the best bid gets the gig. The crucial advantage of such online marketplaces is a wide offer assortment. Even the most fastidious coders will find suitable projects there. Possible disadvantages? In case of misunderstandings and/or conflicts with clients, no one else can solve them but you two.
The most prominent examples of bidding marketplaces: Freelancer and Upwork.
Order-based marketplaces are very much alike to the bidding ones. They allow employers to post one-time job orders for particular skill sets. The entry barrier on such marketplaces is low — and that’s, perhaps, their only advantage. What are its consequences? Firstly, it’s difficult to earn a lot: the competition is palpable, and there’ll always be those who take less for the same task. Secondly, the marketplaces frequently don’t give any payment guarantees: you find yourself a microjob, complete it, create a product, and the one who handles the money matters is you.
One of the famous order-based marketplaces is Fiverr.
Some developers consider vetting marketplaces more reliable than bidding because marketplace owners hold more responsibility for the developer-client relationship. Before registering in their database, you should pass a few tests (most often, they will check your coding skills and expertise, occasionally — language skills, and the soft skills of communication/troubleshooting/time management).
Afterward, you become eligible for projects — belonging to the very cream of the tech talent network. Some marketplaces are so caring that they find projects for freelancers and subscriptions for clients, asking for preferable schedules and types (crypto, medicine, edtech, etc.) in advance. The sky is not the limit, though: we know the marketplaces that arrange discovery calls with clients, prepare you for them, and handle all your money matters. Such all-inclusives are rare but still far from nonexistent — and they are the best for entrepreneurs looking for staff possibilities and for devs looking for projects. Spoiler alert: Lemon.io is one of those few, and here’s how we vet our developers.
The most famous vetting marketplaces: Gun.io, Lemon.io, Turing.com
How do freelance marketplace fees impact your search for jobs?
Probably, the key question determining developers’ choices is who will pay a percentage commission to the bidding marketplaces (vetting ones are predominantly free for developers). Since commission-free marketplaces are almost nonexistent (how would they feed themselves?), there are only two variants available: either it’s your employer who pays marketplace fees or you.
What is the primary payment scheme in the first case?
For each payment made to you by the marketplace, you give it the designated extra sum of money.
What’s the other option?
A marketplace announces your cost to the client (including commission) or underlines the “base rate” and the commission percentage.
Now, let’s look closely at some of the most prominent marketplaces using freelance developers.
This bidding freelance platform is one of the most famous services in the freelancer market. Here, web developers can find plenty of bids within a wide price range. Per commissions — yes, they are in place, and freelancers pay them. First, there are two models of work: Basic and Plus plans. On the Basic plan, freelancers pay $0.15 for each “connection” with a potential client (and can have up to 140 such connections monthly). The Plus plan costs $14.99 per month and gives 70 more monthly connections (in addition to other perks). In addition, every freelancer should pay a 20% service fee for every $0-500 of income from a single client, 10% for every additional sum from $500 to $10,000, and 5% for everything that exceeds $10,000.
One more bidding platform for freelance developers. There are five freelancer accounts: Basic, Basic+, Professional, Business, and Executive. Each has its pricing (except for Basic, that’s free). For the cheapest paid Basic+ plan, you’ll pay $11.95 every month. For the most expensive Executive — $49.95. Besides, every freelancer has to give away some commission for every paid invoice. For the Executive plan, it’s 5%; Business plan clients will pay 6%; Professionals — 7%; and those who decided to keep with Basic/Basic+ will have to pay a solid 9%. For those interested in extra bonuses, Guru offers a wide selection: one can buy additional Premium Quotes, Search Boost or extend their Annual Rollover.
Fiverr is an order-based marketplace where developers complete temporary one-time jobs. The entry barrier here is low. The chance to earn a lot is also unsubstantial. Per commissions: both sides pay 20%, so if the price of your service is $100, your employee pays $120, and you get only $80. Pretty tough!
Probably, the most famous bidding marketplace out there. At Freelancer, developers seek one-time hourly jobs and perform them for contractors. For developers, it’s free to register, create a profile, upload your portfolio, and talk over the projects with employers. Freelancers choosing projects with fixed price pay 10% or $5 (depending on what’s greater). For hourly projects, they should part with 10% of the rate.
Pros and cons
The main bonus of bidding marketplaces is their liberal attitude toward specialists with little experience. Even the green developers can find a contractor with some petty tasks even a junior can cope with. Bidding platforms don’t sieve their customers and allow everyone to register, have a profile, and look for jobs.
The key downside of such marketplaces as Fiverr or Freelancer is their insecurity. Freelance specialists (and contractors, for that matter) are extremely fraud-prone since the marketplace often doesn’t perform extended security checks.
The commission system is very developer-friendly at Lemon.io, a Ukrainian marketplace for vetted developers that connects European programmers with American startups. For coders, all the work within the Lemon.io system is entirely free: after the vetting process (professional networks/LinkedIn review, English language proficiency and soft skills test, hard skills/coding interview with one of our senior developers), the developer is registered in the database. They are now available for hire.
When a suitable project appears, our Matching and Recruiting departments will contact you and ask if you’re interested. If the answer is positive, cooperation starts. In case of any problems, you reach the Customer Success department. All employers pay the developers’ rate plus a commission for Lemon.io (for them, it’s one number, out of which you get your money, and we get ours). Such a model eliminates the frustration of several sequential payments and fits everyone.
On the website of this vetting marketplace using AI for developers’ screening, you can find the extended FAQ for both customers and developers. According to the provided information, freelancers don’t pay any extra commissions for using the marketplace — presumably, all the burden is laid on the employers’ shoulders.
Those wishing to hire offshore developers via Codeable will pay a 17,5% commission. Developers themselves don’t pay anything.
Pros and cons
The main bonus of vetting platforms is their solidity and security. Right from the start, after remote workers are vetted, they are registered in the talent database, onboarded, and offered first projects as soon as a suitable client appears. Matching departments work daily to find suitable projects for freelancers and offshore developers. Sales specialists perform calls and close deals, boost the client database, and customer success specialists fix all bugs on the way.
The key downside of this platform type is that quite often, they are closed for juniors and middles — only seniors (or strong middles, at least) can earn there.
To make it even more transparent, here’s a comparison table of two different types.
|Bidding marketplaces||Vetting marketplaces|
|Open for everyone||Open after the pre-vetting procedure only|
|Often no client service||The customer Success department takes care of clients&customers|
|Small tasks and projects||Big, enterprise-scale projects and tasks|
|Commission for clients and developers||Commission for clients only|
We don’t want to sound biased, but Lemon.io is a great place to work for Senior developers thanks to its payment model, full transparency at every step, and careful selection of customers and developers. So, consider it a sign – and apply for a job with us here.
Wanna learn more? Here's our FAQ!
When to turn to freelance marketplaces?
The high time for turning to freelance marketplaces comes when startup owners look for specialists who will turn their visions and projects into life. Most often, startup owners don’t have too much money but are in need of a considerable number of developers. That’s the situation freelance marketplaces handle the best.
Does freelancing count as self-employed?
Yes, freelancers using marketplaces and looking for jobs there are counted as self-employed. They should pay taxes themselves. Companies working with freelancers hire them on a project basis or don’t hire at all.
Which payment method is the best for freelancers?
There is no general answer to this question. The choice of payment method can depend on a freelancer’s location, the currency of their payments, transaction fees, and many more factors. Generally, freelancers use TransferWise, Payoneer, Wise, or some similar system.