Why I'm Leaving Elance (And You Should, Too)

For those of you who haven't heard, Elance is changing its membership structure. And the change is so bad that I've decided to cancel my subscription.

Before, I paid an annual fee. Now, I can only subscribe on a monthly basis. Before, my annual fee gave me 120 free bids per month. Now, my monthly fee will give me anywhere from three to 25 "connects" each month. Before, a bid was a bid was a bid. Now, lower-budget projects will cost me one "connect;" medium-sized budgets cost three, and some "featured" projects cost six or even more.

I've worked on Elance since the beginning of my writing career. When I started, it was a great way to gain experience and make connections. The transaction fees were high, there were too many dummy projects, and there was always a lowballing problem; but for me the benefits outweighed the costs. With these new changes, the benefits are dwindling and the costs are rocketing into space.

Here's why I'm leaving, and why I'm no longer recommending Elance.

It's no longer a good place for beginners to get started. When I first got started on Elance, I signed up under the cheapest plan possible. This plan gave me only a handful of free bids. I thought they would be enough at first, but I soon found that nobody wanted to hire a newbie with no feedback rating. After quickly racking up a bill for extra bids that almost doubled my subscription cost, I bought a plan with an adequate number of bids. It took me about three months of unselected bids before I landed my first project.

Now that would no longer be feasible. New providers would have to spend a great deal of money on extra "connects" before landing even one project. And that project is likely to be extremely underpaid, as you usually have to underbid everyone else to get work as a newbie provider. It might take you a year or more to make back the money you spend in "connects" landing those first few jobs.

"Connects" are costly--no matter how you look at it. Elance claims that under its new plan, prices would go down for 80% of its providers. While this may be true in some other categories--programming, administration, graphics, etc--that are more highly paid, writers get the shaft. The "writing and translation" category was cheaper than others under the old plan, but writing jobs paid much less on Elance than jobs listed in other categories. But if I paid for a plan equivalent to the one I have now under Elance's new structure, I'd pay around $1,200 per year--that's nearly four times what I pay now. And that's not including the 8.75% transaction fee Elance charges on each project. And I'll be bidding on the same low-paying jobs, for the most part; payment won't go up along with costs.

The monthly costs may be lower for some providers in some categories. I've found them to be roughly equivalent, and often a little higher, to what you'd pay for an annual plan in the writing and translation category. But that's not what makes it so expensive. What Elance's new plan does, essentially, is force providers to buy extra "connects." Their most expensive plan provides 25 free "connects" per month. A single "connect" might be worth one bid for a low-budgeted project, but for a medium-sized budget you might have to spend three. I usually bid on medium- and high-budgeted projects, so this plan would only allow me three to six bids per month.

It's no longer feasible to be the "high-quality option." My strategy on Elance was to offer professional rates for high-quality work. There were plenty of low-balling writers from third-world countries out there who were offering substandard writing for substandard rates, and a lot of buyers went with the cheap option. But there were still a handful of buyers who were looking for quality, and I tended to find one of them for every ten to twenty bids I made. I spent a lot of bids to land a single job.

Now it's just not realistic to do that. I'd have to pay extra for every bid I made, so every bid would have to count. I can't take the chance that hundreds of my bids would go unchosen to land a few projects--it just isn't financially viable.

The new system will make underbidding worse. Elance claims that by asking writers to pay more, it will squeeze out the lowballers who bid pennies on dollar projects. The idea is that these writers can't afford the new costs, so they'll leave. But I usually bid higher than most other bidders--and I can't afford the changes, either.

In reallty, I think the change will make the lowballing problem worse. Before, I could afford to spend twenty or thirty bids to land one project. Now, every bid will count--I can't afford to waste any. If I stayed, I'd be forced to lower my prices considerably in the hope that more of my bids would result in paid projects and help me recoup my losses.

Elance isn't addressing the real problems. Elance states that the reason for the change is to combat several different problems the site has been dealing with ever since I joined. One is the problem of "non-serious" bids--providers simply throwing a lowball bid on every project they find in the hopes of getting work. Some high-budget projects attract dozens of bids, not all of them serious. If each bid costs money, providers will bid more carefully.

Some buyers may get an influx of bids, but on most I've seen only a maximum of twenty or so. The bigger problem on Elance, in my experience, is dummy projects. Some buyers post projects simply to get an idea of the cost or to try to find free work. Others simply don't follow up on their projects. Today I'd say nearly half the projects I bid on never go awarded. Under the new plan, about half my "connects" would be wasted on projects never intended to be awarded at all--and Elance has no plan to reimburse writers for those "connects."

Elance essentially railroaded these changes down the throats of providers. The new change goes into effect on December 4, and I received an email about this at the beginning of the week. We didn't even get a month's notice. Even worse, many providers who renewed their memberships recently under the old plan (myself included) are seeing their old membership terms evaporate. Elance isn't being clear on its refund policy; I received notice that Elance would not be offering refunds on old memberships that have not expired, but Jon Diller, the president, did say in the forums that refunds would be available. I have a feeling that it will take a lot of phone time and arguing with sales reps before I see any money back for my membership, if I ever do.

So, for any new writers out there looking to get a start in Elance: don't do it. The new model will not be kind to you. You'll be forced to pay extra for every bid, and it'll take months to land your first feedback rating.

Here are a few other blogs that are covering the Elance changes. I'll add more to this as I find new sites; if you're a blogger and you have a post up on the Elance changes, leave a comment here and I will add you to the list.

The Hidden Writer
JCM Enterprises
Irreverent Freelancer
Swan's Blog
Words on the Page
Fab Freelance Writing