Updated On: 30 August 2024
The freelance industry accumulates a major portion of the global workforce, accounting for over 1.57 billion freelancers. When other industries struggle because of economic bubbles, inflation, economic recessions, or other financial crises, the freelance industry remains resilient and provides the means of employment to diverse professions. The same was witnessed during the early 2020s that faced a major recession because of the pandemic. However, as many professionals lost their livelihood, they adapted to freelancing and used marketplaces like Upwork and Fiverr to find high-paying freelance jobs.
As per the statistics, the freelance platform market size is expected to reach $9.5 billion by 2030 and Upwork and Fiverr are the top marketplaces that working professionals recognize when it comes to freelancing. These marketplaces not only offer work autonomy to freelancers but also resonate with quality projects from all over the globe. Be it digital marketing, software programming, graphic designing, voice translations, voice-overs, business analysis, or human resources services, all these jobs are available on Upwork and Fiverr.
Let’s learn about these platforms in more detail below so that you can also understand how you can build and launch a similar freelancing marketplace.
Upwork is a US-based freelancing platform launched in the year 2015 after the merger of two renowned marketplaces; Elance and ODesk. With their backgrounds dating back to 1998 and 2003, Upwork received a headstart and attracted thousands of clients and freelancers from across the globe. The business model of Upwork was simple, to help freelancers connect with clients and charge a commission as the platform fees on every transaction. Additionally, Upwork also sells ‘connects’ to freelancers to be able to bid on different jobs. In 2024, Upwork is accessible in 180 countries and processes annual transactions of over $1 billion on its platform.
Launched In: 2015 (parent companies launched in 1998 and 2003 respectively)
Founded By: Beerud Sheth, Srini Anumolu, Odysseas Tsatalos, Stratis Karamanlakis
Estimated Revenue: $689.1 million
Fiverr is an Israeli freelancing marketplace launched in 2010. Although it is a freelancing marketplace like Upwork, its business model varies significantly to help beginners, SMBs, and solopreneurs. The primary offering of Fiverr back in the day of its launch was any service, ranging from software programming and digital marketing to designing and translation, starting at just $5. Instead of posting jobs, Fiverr allowed freelancers to upload different gigs and services. Clients could simply browse those gigs and select a freelancer as per their requirements. Like Upwork, Fiverr also charges a commission on every transaction. In 2024, Fiverr is available in 160 countries and has also acquired multiple other freelance marketplaces.
Launched in: 2010
Founded By: Micha Kaufman, Shai Wininger
Estimated Revenue: $361.4 million
While both Upwork and Fiverr follow different workflows and business models, a general workflow can be prepared to help you understand and power your freelancing marketplace. To provide more flexibility to both freelancers and clients, Upwork’s business model seems to be a better fit for our base model as it supports talent search, job search, and job posting. On the other hand, Fiverr’s business model is mostly aligned towards talent search.
Exemplary Workflow for your Freelance Marketplace
The following workflow uses Upwork as a base and is only for reference purposes. You can modify this workflow based on your business model and preferences.
Revenue Generation Model
While the choice of revenue channels remains at the sole discretion of the marketplace owner, integrating multiple channels can bring in more stable returns and help you reach the break-even point faster. The following revenue generation channels can be integrated into a freelancer marketplace.
The capabilities of your marketplace will immensely affect the efficiency with which you run your business. To cater to diverse use cases of a freelancing platform, you require a large set of features. These can be either developed from scratch or searched for in a readymade solution.
Depending on your development approach, the timeline of your actual development project can vary. The approach will also affect your overall budget and time-to-market. To provide you with a complete overview, we are sharing all feasible development approaches along with the most reliable approach.
The traditional development approach that included drafting a Software Requirements Specification (SRS) sheet, selecting a tech stack and hiring a team of developers for scratch development is still available today. This approach can be further categorized into two approaches, which are Agile and Waterfall. However, due to certain limitations, such as hourly development rates and long delivery timelines, and the availability of better development options, the bespoke development approach is not very reliable.
Pros of Bespoke Development
Cons of Bespoke Development
SaaS solutions are a type of no-code and low-code solutions that require none to minimum coding to launch your marketplace project. As the name suggests, these solutions are hosted on the software provider’s server and available as a monthly service. They are also available in multiple subscription packages so that you can select a package depending on your requirements. However, these packages mostly have a limited number of features and come with restrictions on the number of listings (job postings) and transactions as well.
Pros of SaaS Solutions
Cons of SaaS Solutions
Lastly, our most recommended approach is using a self-hosted solution. These solutions are readymade solutions with a wide range of features available for your proposed business. They provide you with the option to select your own hosting server and thus, there are no restrictions on the number of users and transactions. You get access to all features from day 1. As self-hosted solutions are available at a one-time cost and come with a lifetime usage license, these are highly cost-effective in the long run.
Pros of Self-Hosted Solutions
Cons of Self-Hosted Solutions
If you plan to build your freelance marketplace with the self-hosted approach, Yo!Gigs is our recommended solution. It is expertly developed to cater all freelance use cases and can help you launch robust freelance marketplace like Upwork and Fiverr. To provide complete support for both these business models, Yo!Gigs supports both job posting and service packages. Additionally, users can register themselves as individuals or companies, and freelancers can send detailed bids and proposals to clients.
To help you target diverse professions on the marketplace, Yo!Gigs comes with custom task categories up to three levels, backed by custom search filters and registration form creation. With data visualization and essential marketplace management capabilities such as commission management, withdrawal settings, user requests, multilingual and multi-currency support, etc., Yo!Gigs helps you streamline entire marketplace operations. It has multiple payment gateways as well to ensure safe and secure payments 24/7.
With the increasing diversity of freelancers and categories on freelance marketplace platforms, it has become important for marketplace owners to meet the requirements of different users. To accommodate all such requirements, having flexibility on your freelance marketplace platform is must. This is where the maximum scope for gaining a competitive edge remains, as many new professions, such as voiceovers, modeling, and online tutoring have also entered the freelance industry. By providing a comprehensive marketplace for different types of freelancers, not only you can target a wider audience but also provide better USPs than many existing platforms and replicate Upwork and Fiverr’s success.
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Abhishek Kataria is a business consultant at FATbit Technologies. He assists entrepreneurs and business owners in developing viable digital touchpoints and marketplaces. Abhishek is curious about exploring and analyzing new business trends and has a keen eye for the latest developments in the eCommerce sector. Apart from consulting, you can find him practicing French and exploring his creativity in Photoshop.
