Will oDesk’s Paid Subscription Model Work?
oDesk recently announced several changes to the site's business model. Freelancers and agencies are now…
I have several oDesk freelancers on my team who are paid on a monthly basis.
When running payroll for the month ended February 2015, I noticed that the payment interface looked a bit different (see below). Notice anything different?
If you look closely, you’ll notice that there is only one field for “Amount.” In the past, oDesk showed you the full amount, but also included the net amount being paid to the freelancer. The difference between the two amounts was the oDesk 10% transaction fee.
When making the payment, I just assumed that oDesk had removed the net amount in an effort to streamline the payment interface.
Well, I was wrong. Here’s what they did.
Shortly after making the payments, I had a few of my contractors email me with questions. One summed up the sentiment nicely:
Did I get a raise or something? I noticed that you paid me a little more than normal. Or did oDesk change its fee structure?
Of course, being the worrier that I am, I started to panic. Did I overpay my contractors? I had to find the answer, so I engaged with a helpful customer service rep at oDesk. Here’s the transcript of my chat session:
Agent: Hello, Matthew Keener. Can I help you with anything today?
Matthew Keener: Hi there – when I submitted fixed price bonus payments yesterday to my contractors, I noticed it no longer shows a 10% payment being applied to oDesk. I talked to the contractors and they were confused why they received the full amount and there was no 10% removed. Can you tell me if 10% payments to oDesk will no longer be removed? I’m a little confused.
Agent: My apologies for the confusion, Matthew. With regards to your concern, yes the 10% oDesk fee still applies. Only that you may have seen it looks different now, but process still stays the same.
Matthew Keener: But how? On my reports, for example, it shows a $111.11 payment made to one contractor. She claims she received $111.11 also. In whose report is the 10% deduction shown? It’s not appearing on my reports. I just want to confirm that i’m not being charged $111.11 plus another 10%.
Agent: Yes, due to the new interface which the freelancer will see on their end. What they will see is the full amount of your payment and a separate invoice for the 10% oDesk fee which is labeled as service fee. The service fee will only be deducted once the payment is received on their end.
Matthew Keener: I made the payment for $111.11 so that her net payment would be $100.
Agent: No, what you pay is fixed and thus will only be deducted when the freelancer receives it, thus the service fee is charged to them.
Matthew Keener: OK, thank you.
After closing the chat session, I logged into oDesk as a freelancer and checked out recent payments from some of my clients. Sure enough, oDesk is now showing the full dollar amount paid by the client to you the freelancer, and then deducting a 10% service fee as a separate line item (see below).
I’m not sure why they’re doing this, but it is certainly a different approach. What are your thoughts about this change?