It's Official (PPH IS NUMBER 1, and not in a good way)
Thought Upwork was expensive with its fees? Well, PPH have today gone one better and most likely surpassed them in becoming the most expensive platform for freelancers.
The vast majority of invoices (those for jobs less than £500, with one off clients) not only will PPH take 20% plus VAT from the seller, but also a further 10% from the buyer as payment fees.
Greed, pure greed.
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Natalie
"Research among community members has shown that a fee structure that encourages the building of high-value long-term relationships between Buyers and Sellers is something the majority of Sellers welcome and will reap clear financial benefits from."
Research? one sec, I want details about this research. and which community members ?
Natalie
"The new structure significantly reduces commission once your relationship is well established, and doesn’t reset earnings each month like total billing structures and, even if you currently don’t have enough earnings with a specific Buyer for this change to be beneficial to you, this is bound to change as time passes and your earnings with them stack up, thus clearly benefitting you in the long run."
So I should give you 20% from my earnings to keep a clients using PPH and spend more than £500 ? I think here PPH should give me 20% incentive for keeping a buyer here at PPH and spend £500, I won't Promote PPH for free and pay for it?
I want the fee that resets each month, what I used to pay 15% for the first £175 and 3,5% after that, I am not interested in building love stories with buyers or guarantee to live for ever.
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For the first time in nearly five years I am not enjoying the work I am doing. I am rushing it with the 20% in the back of my mind, desperately trying to find a way for it to be worthwhile.
I earn around £2.5k a month on PPH. With 20% I am giving PPH £500 a month, with VAT it is £600. I am not even registered for VAT as a sole trader.
For £600 a month I would expect PPH to do a lot more- act as an agent, guarantee me work, make instant payments, provide an account manager I can speak to on the phone, give me loads of support, money to spend elsewhere on the platform, featured hourlies, featured profiles, free proposal credits, be invited to events, be part of a community and a really premium service. Where on else in the world and in what industry would you pay £600 simply for a bit of extra marketing and a (slow and clunky) payment system?
I am the only person who earns money in my household. I have three children and desperately trying to juggle being self-employed with them. My rent has just gone up- this couldn't have come at a worst time. I am proud of what I have achieved on PPH, and the work I have done helping start-up businesses across the world. I now feel worthless.
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They are now used to free money, £50 for talent scout (they help you to clikc the accept proposal button), and £ 26 for NDA (a generic PDF attached to your job post) , they are not interested in two figures nums, may be three four five six...
Over £5,000 earned with a Buyer , who is this Buyer?
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Just to let those of you who don't know- there is also another thread discussing the same issue:
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Hi Natalie,
Thank you for taking the time to engage. I will endeavour not to repeat points already raised.
In your message, very similar in content to the email that was sent out, it states the following:
'... that a fee structure that encourages the building of high-value long-term relationships between Buyers and Sellers is something the majority of Sellers welcome and will reap clear financial benefits from.'
Without labouring the point, the fee structure as it was had little to no negative effect on the likelihood of buyers and sellers building long term relationships. In fact, it was significantly damaged when PPH raised the buyers fee to 10% and there are enough comments on this forum that evidence this. By comparison, Upwork charges a fee of 2.75% to its buyers. If I was a buyer, it would be a pretty simple comparison to make and the decision would be pretty easy too.
I humbly suggest that ease of use of the platform, reliability of ratings and reviews, and effective and easy to reach customer support would impact more greatly on the likelihood of long term relationships being formed.
Given the likely impact of the fee changes, (sellers increasing their prices) the fee changes are likely to achieve exactly the opposite of this supposed intent, it in fact that is the genuine reason for the changes.
Your response goes on to say:
'The new structure significantly reduces commission once your relationship is well established, and doesn’t reset earnings each month like total billing structures and, even if you currently don’t have enough earnings with a specific Buyer for this change to be beneficial to you, this is bound to change as time passes and your earnings with them stack up, thus clearly benefitting you in the long run.'
This is absolutely and categorically incorrect. My fee structure was 15% on the first £175 each month and then 3.5% thereafter. The new fee structure's lowest rate is the same, but I have to achieve £5000 per client in order to get to that rate, all the while paying 10-20% along the way.
An alternative way to break this down, is that whereas for every job previously, the vast majority (about 90% and more) were at the 3.5% rate, this is most definitely no longer the case, as even I, having billed in excess of £100k on this platform, can attest, the number of clients to get to that total is 135. Whilst I have had on occasions the odd client above £5000 billing, the fact remains that even with these numbers, the average lifetime bill per client is less than £1000.
Thus, this new fee structure in no way benefits me the short run, medium run or long run, which ever way you look at it.
Others have already mentioned looking elsewhere and even making the very sensible analogy that they may as well spend the same amount advertising their services and leave the platform completely, and this is from some of the highest ranked and biggest earners on PPH. There should be no mistaking the message here, this will damage PPH's revenue and reputation because, whilst I may have recommended PPH at times in the past (before the 10% buyers fee) what do you think the chances are that I, and others, will do so anymore?
If the explanation is to be believed, then the premise on which these changes were made, is fundamentally flawed.
Even in my position, if I were to stay, in order to maintain the same earnings, I would have no option other than to increase my rates, or do more work, and the only beneficiary would be PPH receiving a significant hike in fees either way.
On a final point, almost all of the hourlies, one of the foundations on which PPH was built, constrained as they are in having to be deliverable within 7 days, are by their nature low to medium priced. It is rare to see any priced above £500, and buyers don't come along and buy 10 of them, even the most prolific of sellers of hourlies, the numbers clearly show an average of less than 2 orders per client. (Consider the seller selling numerous hourlies each month, to different clients. A common scenario). As a consequence, a very high proportion of all of these hourlies' billing, which would have mainly been at 3.5% under the legacy rate, will ALL now have a 20% fee applied.
Did PPH really do any research? Did they really ask anyone from the community? BY my estimations there are about 150-200 top certs. There are a number of them on this discussion alone and none of us were consulted or asked our opinion and I think our response would have been quite predictable.
Yes it is your website, and written into the terms and conditions will be a massive get out clause that you can do anything you want and make any changes you choose, but that doesn't make it right. If that means anything these days.
From a business perspective, this adds no value, other than the percentage rake that PPH takes from transactions and I would suggest that isn't a good enough justification.
I'd like to think that some of this is worth the effort, but disappointingly the communication between PPH and its community is lacklustre at best. The comments here clearly show that people don't feel engaged, part of the process, or that due consideration has been made.
If you want to apply new conditions to new joiners, feel free. But imposing changes on the existing user base...it's not what I signed up to, and it's such a bitter pill to swallow that I might very well not take it.
There would be no shame, in fact PPH would probably earn some respect, if it were, after due consideration and feedback, to say 'Hey, we got it wrong. We made a mistake'. I just doubt that is in PPH's vocabulary, but I can only hope so, for the likes of Meri, and others, whose monthly fees will most likely exceed the income tax they will be liable for. Now surely that can't be right and is an indication of having gone too far.
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Well said Sean. This is going to damage PPHs reputation and the negative reviews online will totally destroy it. There's no future here I'm afraid. Not like this.
It's time to admit PPH you made a mistake on this one and there's no shame in admitting it. In fact, we will respect you more for it -
They won't change anything, it won't happen. the same story with oDesk (cr)Upwork : few days of boiling, then like if nothing happened "Slave happiness everywhere". no one has @#$%s to do a strike or quit.
What is going to happen next? PPH will purge all @#$%@ sellers, suspend all #@$% accounts, doubles, fakes, inactive ones, low performing ones, people who talk in the forums, will add a terms section that gives PPH the right to @#$%@ you with or without reason, and leave only top certs and the bottom Kunta Kinte, exactly as Upwork, freelance will be a luxury to pay for rather than freedom, kinda new definition of work, Work 4.0
No surprise, it was very clear that they wanted to apply 20% fees on everyone from last year, invented a temporary farce for old sellers to earn min of £50/month to keep the original fee structure, they promised a vacation mode, and fixes to keep the 15%-3,5% fee (old users don't worry) yeah !
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I will add to what is being discussed here what I mentioned in other threads. As Sean, I will also transfer that fee to my customers, now that I know that it exists (meaning that I already paid 20% from my own pocket in the jobs I delivered this week, which I find disturbing). But the last two years, finding new clients with money to spend on PPH has been increasingly difficult, since most of the people with good budgets to spend have move on to different platforms or to person to person contact. The hourlies, as has also been mentioned, have been rendered useless due to numerous changes that only benefit PPH's pocket with the "feature" option.
In my field, over €6000 per client is very difficult (lets be honest: I don't have one and I have 740 reviews and I've worked exclusively with PPH for 6 years). I cannot imagine who would need €6000 in icons unless you want to cover the Louvre with little drawings. So lets say that my good clients are "all" (which they aren't) on the second range, 7.5% fee. When they pay me, I have to charge extra 7.5% plus a 10% fee on their side. Since people have brains and they are able to think, a client will eventually say: "maybe it is better to outsource OUTSIDE this website". Directly via Paypal is only around 5% I think. Other websites have less than 5%. There is absolutely no benefit for either the client or the freelancer in working via PPH under this new fee scheme. A client will not spend extra €5500 of graphics they don't need so "I don't have to pay 20%", they will just take their business elsewhere, as they have been doing the last couple of years.
As Paul, I am also hoping that PPH will rethink this scheme and correct it before it's too late and there is no one left to complain.
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I have three weeks worth of work booked- all at my previous rate before the 20% was introduced. So your message Vanessa has really hit home- I have put my prices up to reflect the 20% (which has really upset me)- but for the next 3 weeks will be paying for the 20% out of my own pocket.
It just gets better and better.
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A "High Value" website at £130 advertised today...
£130 minus PPH commission £31 = £99 minus TAX and NI I have to pay = £74. Plus other costs to run my business of £15 = £59.
I estimate this project would need at least 20 hours so £59 divided by 20 hours = £2.95 an hour!!
Plus it has cost me more than usual to apply for this job as it classed as "HIGH VALUE" !!
Sorry I cant work for £2.95 an hour. Its illegal anyway!
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PPH still claim not to charge buyer fees in the relevant user guide,
In recent months, I have really noticed a downturn in the level of work relevant to my skills and i have gone from making at least a dozen bids a week to maybe 3 or 4.
Also, the success rate of those bids has dropped off so i am winning one bid every 2 or 3 weeks rather than one every few days.
Whatever the 10,000+ words of Terms & Conditions say, buyers are generally surprised by the charge and many have stated, on this forum, that they will not use PPH again.
30%+ fees for the simple act of 'introducing A to B' is far too much. -
I use both platforms as a buyer.
We've spent a shed load more through Upwork than PPH. I find Upwork's structure is geared towards longer relationships - described roles, interviews and weekly payments. I like the Hourlies on PPH but they don't usually transition into an ongoing relationship, just one off gigs.
As a buyer I would expect to pay more for a one off than for the same work with someone I have an existing relationship with.
Hope this perspective helps sellers when pricing services under the new commission regime.
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