Our Service Fees just dropped off a cliff!

   

Dear PPHers,

We’re pleased to share with you details about upcoming changes to PeoplePerHour’s fees structure. This is a change that will go into effect on August 1, 2012. All work that’s initiated up until July 31, 2012 will be grandfathered under your current pricing plan.

The headlines
We started off with an aim of levelling the playing field and rewarding our loyal users who bill more volume through the site and give them the most competitive fee structure we can afford. So here’s what we came up with:

All work billed through the site will incur a 3.5% Service Fee, apart from the first £175 in the month (€210 and $280 equivalent) which will incur a 15% fee.

30 days at 3.5%, 1 day at 15% Service Fee!*
Why £175 you ask? That’s the earnings for someone who uses PPH as a substitute for day’s worth of work at the current average hourly rate. So with this new pricing, a typical user who puts all their work through PPH will only pay 3.5% apart from one day a month. We need to charge a little higher in that one day than we used to in order to make this work, however, for our typical PPHer who bills consistently through PPH this will mean an overall much reduced monthly service fee and a fair and square ‘the more you bill the less you pay’ policy that keeps everyone’s interests aligned.

*for months with 31 days. You get the gist.

Here are a few worked examples:

For practical purposes and to avoid a job incurring different rates from the last day of the month to the next, the way this new pricing will materialise is as follows: all invoices will incur the starting Service Fee of 15% when the invoice is paid by the client (as is now the case) and then at the end of the month a credit will be made to your PPH Wallet to adjust to the effective rate as per the above. You will be able to see a statement which shows how the rate is calculated.

Say ‘hello’ to daily payments!
Historically pay day on PPH was Tuesday and Friday, which meant that our freelancers had to withdraw funds before then. We’ve listened to your feedback, we know how important speed of payment is to you, so we’ve doubled down and are now introducing daily payments. Please note that the usual latency in the banking clearing system will still apply and affects the timing for when the funds arrive in your bank account. From 1st August when all of the above is effective, every day on PPH will be a pay day!

Flat monthly fees are over! Increase in free bid credits
As you know the Gold & Platinum membership schemes have been abolished. With that we have also enhanced the Standard (Free) usage plan upping the number of free bid credits per month from 10 to 15, which covers about 95% of our active users’ typical monthly activity. If you are an even more active user than that, you will still be able to buy extra credits on a sliding scale. This provides for an opportunity to bid on several projects per month for free and if you want to do more, you can.

More free withdrawals options
We have historically absorbed the cost of processing payments into our Service Fee, and we will carry on doing so for BACS (applicable in the UK). We are also introducing ACH for our US users, where again, we will absorb the cost of payment processing. Users who choose to get paid by PayPal will incur a charge of 1.9% on the withdrawal amount (which is a fee that PayPal charges us). Despite negotiations with PayPal they remain a very expensive option that users still would like to have. As such, we need to pass along that cost in order to make the rest of our Service Fee structure viable. We’re always investigating other payment options and will roll out changes as we solidify these relationships.

One step closer to our mission
Our users have told us many a time in the past that they want to bring their outside clients to PPH as they value the security of getting paid and the support service we offer along with the benefit of building up their profile and having everything organised in one place. The previous flat fee structure was not conducive to encouraging this.

We started with that question in mind: how do we structure our pricing so that those loyal users who end up building their entire business through PPH end up being rewarded for it appropriately? Given that these users are the driving force behind PPH it made sense to us to configure our pricing model around them.

This is what the new structure achieves. And therefore we feel it takes us – together with the rest of the changes coming soon with our upcoming launch – one giant step closer to our mission of helping people live their dream of having their own business and building it up one hour at a time.

Sincerely,
PeoplePerHour Community Team

One last item:
For existing members with paid premium gold and platinum plans: A previous blog post indicated that these plans would cease at the end of June. As we’ve decided to roll out the pricing on the first of August, Sellers enrolled on these plans were automatically extended for the month of July. If you have any questions, please contact our support team at support@peopleperhour.com.

Updated 31 July:
Please note that the above does not include VAT, where applicable. For complete details about the new pricing, please review our Terms & Conditions

Thanks also to Douglas, who helped us create the image that accompanies this post. We saw his Hourlie and got in touch. He turned it around in lightning fast speed!

 

30 Comments

  • SKV

    To summarise my feelings, well done I really think taking a market approach to more billing on PPH is much better than any regulatory approach, thanks for this.

    Is there any place you have indicated the cost of additional bids, just to make a few calculations regarding our overall cost.

  • Eric Fleming

    Thanks @SKV.

    Yes, the Proposal pricing will be as follows..

    5: £3.95
    10: £5.95
    25: £9.95
    50: £14.95
    100: £19.95

    We will have these offered in round equivalents of € and $ as well.

  • Reece

    I’m not too sure about the 15% rate for the first £175. This seems a little unfair.

    Only time will tell I suppose. But its great to hear about daily payments. I’m looking forward to the new look of People Per Hour!

    Reece

  • Douglas

    yes 15% is a bit high I think. I think that 10% would be a better rate.

  • SKV

    Thanks @Eric Fleming, frankly I think thats a little steep, and can you not think of a per-bid model, in any case the accounts are settled after the month. Considering that my conversion ratio is about 1 in 5 (which I think is almost an average here) that would make the cost of 1 job about £4 costlier and considering the reduction of just 2% (from my gold rate now), I think there is room for a re-look at this rates.

  • Paul

    I don’t think any PPH freelancers think the new scheme represents rates falling off a cliff. I think climbing to new heights would be a better analogy.

  • linda thompson

    I have to say I think the changes overall will be to the best. However in line with some of the other comments I do feel that 15% is quite a large percentage for a small time freelancer to use. As you (PPH) get larger there are more people to compete against for jobs…. sometimes we can go for weeks without winning something…. administrators cant charge a great amount per hour for their work as they will be undercut from other countries….. all this adds up

  • Sofia Antonia Milone

    Agreed, what I’m reading is that I have to earn a heck of a lot per month to come even close to getting the same reduced rate I used to enjoy on my membership scheme… so only incredibly high earners and PPH seem to benefit from this.

    This is not at all what was implied. I am most unhappy indeed.

  • Gemma Middleton

    To be honest, the new service fees will save me money due to the amount I earn on PPH monthly. However, the system is totally unfair for the lower earners. It’s like saying ‘we don’t value you if you don’t get earn enough every month.’ It’s hard to get established in freelancing and high fees will drive people away.

  • Greg

    I agree…

    I have to say I clicked on the link to this thinking ‘Excellent this is such good news they are lowering the fees – what a help this will be!’ as I have felt 10% is rather steep already – for those like myself who are unfortunately struggling, the new 15% for the 1st £175 is a horrible blow. For a while now I have been feeling that something around 5% would be much fairer. If you just have 5-6% for everyone surely things would even out and have a much more positive response across the board … rather than have the low earners feel they are paying for the higher earners to have a lower rate.

    Quite simply PPH – Please do NOT go ahead with the 15% idea.

    Thanks

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  • Evan Davey

    This new fee model heavily penalises start-ups / new site users who are likely to bid on many small jobs with a low conversion rate and have limited monthly volumes. Frankly, it makes the prospect of using this site to build a client base far less attractive – very close to the point of being uneconomic. It has forced us to review our participation and revisit competitors. It is hard to justify the name ‘per hour’ when this model discourages that. I hope you revisit this policy or consider introducing a honeymoon period for new participants.

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  • Sofia

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  • John Jelf

    As a person who bids on lots of Jobs, but very rarely get them, 3 so far in a couple of years, it looks like I will end up paying the 15% on most of my earnings through PPH, this will mean that I will have to increse my price to a higher level than my standard rate to cover that extra cost.

  • Greg

    15 days and my comment is STILL awaiting moderation??? Why are you not clearing it? Are you afraid of constructive comments that don’t support your new pricing structure? having just reviewed the new Terms in detail I’m unfortunately even less keen on the new fees… taking 15% off everything each month and then only refunding the extra 11.5% on earnings over £175 at the end of each month… what!!? Well if you make any interest on that 11.5% I hope you’re going to forward that onto the freelancers also as it’s technically their money!

    I’m sorry but this is NOT good news – not at all and to be honest feels like bad and unethical business practice.

    A concerned freelancer.

  • Owen Carter

    This seems absurdly unfair to anyone not earning substantial amounts through PPH?!?! what about the other end of the scale, where someone who can only earn £175 in a month will end up with £115 after paying a £2 invoice transaction fee, a 1.9% paypal fee, and 20% tax.

    How can we price ourselves if that was the only job we could get? An extra 25 bids (because we are trying so hard to find work) will cost a further £10, so effectively this 1 job could cost us £70.

    I’m uber confused. I’ve spent a lot of time trying to get a good profile and references to back it up, now PPH have removed all references outside PPH jobs and dropped this one on me; after busting my balls for months trying to establish a presence here, I feel like I’ve been left out of some elitist party

  • Paul Armstrong

    I ‘ve already made my thoughts clear to PPH about this. I somehow expected this when the new website was announced. I’ve received a polite reply but I’m not convinced – my last point hasn’t been answered.. This is what I said: ‘I’m not at all happy about the massive increase in fees just announced. As it is 10% is a lot in itself, let alone 15%. Many ‘buyers’ are reluctant to even pay much above the minimum wage or have a habit of sliding in ‘commission only’ jobs’ – and PPH don’t appear that interested. Add to this the difficulties in using the clumsy new website and the pressure to post everything open to all and sundry via the ‘Hourlies’. I’m seriously considering taking my business away from PPH as a result.I’m not sure it’s worth it. Perhaps you can at least let me know if there will still be a 2% ‘invoice’ processing charge on top of the 15% fees – which PPH have also recently introduced.

  • CosmicTen

    15%! Robbing b******s. Seriously though, even an agent doesn’t take this much, on top of the PayPal fee and of course the fee after the 15% thresh hold. Shame given that PPH has quite good useability but this is enough for me to leave, right away.

  • Bartos

    I’m a bit confused. I sold a few hourlies and the rates charged are more than 15% when looking at transactions. It’s more like 16-19% and this is a bit worrying – Any ideas as to why I get charged more than 15%?

  • Steve

    Clients come to PPH for some bargain work, not to pay agency prices so to suggest that anyone but a tiny proportion of freelancers can earn anything like £175 a day through the site is way off which means the 15% fee is far too high.

    It needs to be drastically reduced for freelancers to see PPH as a viable option for sourcing work as the extra effort to find work by more traditional means does seem worth it at these levels of commission. I’ve only been using the site on a few occasions where my work has really dried up and I’ve felt like I’m working for nothing at the original bid price never mind with 15% taken off it.

    Daily payments was a good and much-needed move, however I have still known it take up to a week for the funds to appear in my account. My regular clients outside of PPH tend to pay me by bank transfer which appears in my account instantly and doesn’t cost them anything, why don’t you offer this service? Failing to do so just means more people are going to encourage their clients to pay outside of the PPH wallet system.

  • Luke

    They haven’t fallen off a cliff .. they’ve increased substantially. Bill £320, get charged almost 60 for the privilege of being paid. As a first time user I’m disappointed .. and to be honest I don’t think I’ll hang around until rates are made fairer.

  • kris

    @ Gemma Middleton , yeah . it’s not conducive. As a student trying to earn at PPH for me it’s unfair. Anyways , getting a job right away is good but for the people who earned small income in a month ,the percentage was a little bit expensive.

  • Zainul

    I think the should bring the upper limit for 175 to 100 as in general freelancers can not earn 175 and no body will be benefited from this instead of companies who work on PPH as they have thier base they will be benefited by low caost

    Other thing should be to lower the cost as well

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