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How Freelance Marketplaces Allow Entrepreneurs to Compete

If you are a one-man-band how do you compete against the entrenched, established professional firms or mega corporations?  The answer is quite simple: you utilize marketplaces. Marketplaces allow you to access talent at a significant discount.

Why is it discounted?

“The simple reason for this cost savings is the reduction in overhead. Freelance labor marketplaces don’t have middle layers of managers and other support staff,  [but instead] they have independent contractors rather than employees, and they don’t have the cost of office space.  The cost savings are dramatic.” (Techcrunch)

Here’s an example from Elance:


If you were to hire a good video editor in United States, you would pay $50-100 hour.  The starting wage for these top freelancers starts at $10/hour. It doesn’t take much to see the ROI from entrepreneurs using a freelance marketplace.

While entrepreneurs do have the freedom to shop based on price or other factors, marketplaces like oDesk and Elance are priced significantly lower than going through an agency. This reality is why marketplaces are taking off.  

On a cautionary note, just because you outsource the project does not mean that you are absolved from managing the project. As with an employee or agency, you need to communicate clearly what you are trying to achieve, what specifically you are looking for in a solution and when you need it.  A project outline or plan is the difference between success and failure in a freelance marketplace. Make sense?

Topics: Entrepreneur


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