Published on January 25th, 2019 | by Guest


Insights of the business model & revenue model of Upwork that made the marketplace successful

The contemporary extent of web & internet technologies has created a replica of almost every physical aspect in the online environment. From buying a t-shirt to replenishing the grocery supplies, from getting a job to finding a plumber, all that you can find in the physical world can be found on the internet as well. However, sometimes, technology does not only fetch the stuff to online world but also breed completely new set opportunities for business development. The kind of job that Upwork is doing is an example of how things can become even better in the online sphere.

What is Upwork?

Upwork is a Freelancing service marketplace that connects business to the ideal Freelancers for a particular job. It allows two types of users on the platform: Freelancers and Businesses. The basic idea behind Upwork is letting business find ideal freelancers for each task that one can deliver over the internet. The platform aims at eliminating the limitations created by geographical boundaries and let business connect with best professionals from anywhere on the planet. Anyone with the right skills can start freelancing on this platform.

Business model of Upwork | how does it work?

Built from the pioneer- TaskRabbit Clone, Upwork works effectively by simplifying two major problems of a business operation-

  • The necessity to hire a full-time professional to get things done
  • The limitation of finding an ideal talent within the constraints of geographical boundaries.

Now, when Upwork comes into the picture, the above two issues are eliminated as if they were nothing. Businesses with Upwork profiles can get their work done by freelancing their tasks and without necessarily hiring professionals at their premises. Moreover, one does not need to mention that business can get their jobs done from freelancers spread across the planet.

Step 1: Businesses create Upwork Profiles and post their jobs with requirements and other details.

Step 2: Upwork Algorithm quickly traverses and matches right freelancers for the job.

Step 3: Businesses view and inspect Freelancers’ profiles, reviews, and quotations.

Step 4: After selecting the best suitable profiles, businesses interview the candidates.

Step 5: Businesses assign the project to the selected candidate.

Step 6: Businesses explain the project and requirements in detail and document everything on the Upwork interface.

Step 6: During the project duration, both the parties utilize built-in features to-

  • Chat with each other
  • Share files
  • Collaborate using computer
  • Manage timesheet
  • Take live screenshots while freelancer is working

Step 7: After Project completion, Upwork provides the payments with concerned invoices.

Note: ‘Upwork Payment Protection’ ensures that freelancers are being paid for the authorized work only.

Key aspect in Upwork’s Business model

The key entities and aspect of the business model being followed by Upwork involves seven major components-

Key Partners

The ‘key partners’ component defines the major stakeholders who collaborate on the platform. For a Freelancing service marketplace like Upwork, the key stakeholders are Businesses who post the jobs and Freelancers who accept the jobs.

Key Resources

Resources define the key information being fed to the key partners for making informed choices and better decisions. The resources that help business could be the list of qualified Freelancers, Access to Freelancers’ profile etc. The same is equally applicable to Freelancers where they can update their profiles and search for jobs related to their skills.

Value Proposition

As a value proposition or unique selling point, the platform guarantees as many connections between businesses and Freelancers. It aims at delivering the fundamental requirements from both the key partners.

Customer Relationship

The concept of customer relationship ensures a healthy flow of information in a secure environment on the platform. The platform guarantees the safeguarding of all the data concerned to the business and freelancers. This actively includes the safety and security of user account and payment information of both the parties.

Customer Segments

The algorithm manages the segmentation, where it classifies the business on the ground like skills and experience required for the posted job. For freelancers, the platform manages a similar approach by categorizing the freelancer’s profiles based on skills, experiences, reviews, and ratings.

Cost Structure

Cost structure manages the payment models and billing of the job done on Upwork. It does so by offering the flexibility to choose from Hourly or Fixed billing models.

Revenue Streams

Revenue streams define the flow of money across the platform. i.e. payment from the clients and payments to the freelancers. For example-

For hourly projects, the freelancer and the client need to download Upwork desktop application where they can manage the work diary and reporting. The client receives an automatic bill calculated by the work and timing reported by the application.

The fixed payment model work by first setting the deadlines and milestones for the project. Once submitted the milestones on time, the client releases the payment to Upwork, which is then transferred to the Freelancer after approval and deduction platform’s service fee as commission.

The platform charges a freelancer service fee on earnings done on Upwork. It is charged as a sliding fee based on lifetime billings with each client. Here are the details as quoted on Upwork’s website:

  • 20% for the first $500 you bill your client across all contracts with them
  • 10% for total billings with your client between $500.01 and $10,000
  • 5% for total billings with your client that exceed $10,000

For example, if you agree to a $1,000 price for a job with a new client, you will be billed 20% on the first $500 and 10% on the remaining $500.

Image source: Upwork

Kind of Projects Allowed on Upwork

Anything that you can do and deliver using a computer and internet connection, you can freelance for it on Upwork. Here is a list of the popular type of works that happen on Upwork:

  • Web Design
  • Web Development
  • Graphic Design
  • Software testing
  • Photography
  • Content Writing
  • Search engine Optimization
  • Social Media Management
  • Digital Marketing
  • Project Management
  • Accounting

Can you build a Freelancing platform of your own?

Indeed, the business model of Upwork is inspiring. Studies proclaim that more than 35% of the workforce in the US is comprised of freelancers. When there is a huge population of skilled talents already available to work on projects across the globe, it would be a wise thought to start something like Upwork.

So what do you need to start a business like Upwork?

Simply, a service marketplace script would do the job. As Upwork operates in a similar manner to TaskRabbit’s business model, you can get your freelancing platform up and live in no time. They possess all the features and functionalities similar to Upwork by default. However, you should run a crosscheck to make sure, if they are already present or need any customization. If you symbolize a passionate entrepreneur, you might not want to waste your time and money on the wrong choices. Run a complete check before finalizing a clone script that fits you the best. Trying out their demo versions beforehand is one of the crucial suggestions that you can adopt from this article.

Author Bio:

I am a professional blogger, guest writer, Influencer & an eCommerce expert. Currently associated with ShopyGen as a content marketing strategist. I also report on the latest happenings and trends associated with the eCommerce industry.

Email : [email protected]

Follow me on Twitter @Jessicabruc (


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