Upwork Business Model: How Upwork Works & What Is Upwork Clone?
Upwork is a popular freelancer marketplace that came into existence with the merger of two freelancing companies, Elance and oDesk, in 2015. The company Elance was originally founded by Srini Anumolu and Beerud Sheth. Similarly, oDesk was founded by Odyaaeas Tsatalos and Stratis Karamanlakis. After 18 months of the merger of these two companies, Upwork came into existence. The basic idea behind building Upwork was to connect businesses with freelancers to complete business projects.
A freelancer marketplace platform involves two parties; the employers and freelance candidates. Upwork popularized the freelancer marketplaces among both the parties.
See Also: How to Build a Two-sided Marketplace Strategically?
Benefits Of Freelancer Marketplaces For Businesses/Employers
- Using freelancer marketplaces, employers can find more accurate talent for their businesses.
- Employers get access to a wide pool of qualified professionals who meet the prerequisite criteria of the project.
- Employers have the benefit of choosing an affordable candidate to get the job done.
- They have access to check previous work submitted by the candidates and choose the right candidate accordingly.
- Employers need to pay only for the work being assigned which is more affordable option as compared to permanent employment.
Benefits Of Freelancer Marketplaces For Freelancers
- Candidates get a wide exposure to their skills while having the liberty to work at their comfort.
- Freelancers may get a chance to work with their desired employers irrespective of their location.
- Freelancer marketplaces offer secure payment options based on escrow systems to ensure timely payments.
- Freelancer candidates enjoy work life balance due to flexibility of taking up a job at their preferred time.
The popularity of freelancer marketplace is quiet eminent from the growth of Upwork. Here are some key Upwork stats:
- There are 145.4 thousand core active clients at Upwork who spend at least $5000 per year.
- In the FY 2020, Upwork reported revenue of $373.63M.
- Upwork’s revenue has grown at a CAGR of 22.4% over the past 4 years.
- In 2020, approximately 1500 freelancers engaged on Upwork indicating 50% increase from freelancer count in 2018.
Upwork Revenue Growth
Such amazing growth stats have intrigued entrepreneurs to learn more about Upwork business model and launch Upwork clone.
What Is Upwork Business Model?
Upwork business model is governed by the idea of getting work done for a business without hiring a permanent employee. Businesses or employers post about their task requirement on Upwork. Upwork analyzes the task requirements and matches them to the right freelancers. Employers can check the candidate profiles, reviews and bids before interviewing the top candidates.
Upwork also offers a chat option to allow employers and freelancers discuss about projects, share files and collaborate on projects. Invoicing and payments for work happen with Upwork protection so that employers have to pay only for authorized work.
Key Customers: The key customers of Upwork business model are business employers and freelancers. Upwork is a suited platform for companies looking to hire talent or professionals with specific skills and professional freelancers looking for work opportunities. Thus, Upwork business model is a type of online skills selling and professional buying platform.
Value Proposition: Upwork creates immense value for registered businesses and freelancers.
Value Proposition For Employers-
- Employers have access to wide skill set.
- Companies can analyze candidates based on prior wok.
- Employers get bidding from multiple freelancers to choose affordable candidate.
Value Proposition For Freelancers-
- Freelancers have access to wide range of tasks.
- Upwork assures timely and accurate payments for freelancers.
- Upwork has verified employers which assures security for freelancers.
See Also: 6 Most Efficient Marketplace Business Models To Boost Revenue
Userflow Of Upwork Business Model
Client Portal Of Upwork
- Sign up & post a job requirement.
- Freelancers post bids and proposals on job requirements.
- Employers can use Upwork platform to schedule calls and interview candidates.
- Employers can track hourly work progress so they have to pay only for actual time spent on work.
Freelancer’s Portal Of Upwork
- Click on the button ‘Become A Freelancer’ to get started.
- Create a profile and Upwork matches them to right job postings.
- They can check the job postings and post bids.
- Once accepted, freelancers can choose from multiple payment options including hourly and fixed paid.
How Does Upwork Earn: Upwork Revenue Model
Upwork has raised a total of $168.8M in 12 funding rounds. Apart from funding, Upwork revenue model has two revenue streams:
- Commission From The Freelancers: Upwork charges 20% commission for first $500 a freelancer charges to an employer. Moving forward, the freelancer has to pay 10% commission for billings between $501 to $10,000 and 5% for billings above $10,000.
- Different Membership Plans For Employers: Upwork offers 2 types of membership plans to employers; Basic and Plus. The basic package is free and employers can get 3 freelancer proposals for a job posting. The plus package costs $49.99/month and the employer has access to a dedicated account manager and 15 proposals per job posting.
See Also: How to Start a Successful Multivendor E-commerce Marketplace?
Now that you have in depth knowledge about Upwork business model and Upwork revenue model, you are ready to launch your own Upwork clone. Post COVID-19, the number of professionals switching to freelancing has increased and this indicates a tremendous increase in opportunities for gig marketplaces or freelancer marketplaces, as they are more commonly known. Before starting developing an Upwork like app, know more about knick knacks of Upwork like app development such as features of Upwork clone, cost of developing Upwork clone, etc. We have got answers to all these questions at Code Brew Labs. Let’s connect now!
August 14, 2021
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