How I built a 6-figure freelancing business on Upwork

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If actively seeking out and finding clients is something you enjoy, then it’s safe for you to skip this post.

To be clear: I’m talking about the “business” stuff everyone always says we have to do, even though a small piece of our creative soul dies every time we actually do it.

  • Prospecting potential clients.
  • Selling our services (or worse, upselling).
  • Networking.

The “dirty work” of freelancing.

Not only is it about as much fun as a blistering sunburn, it also sucks our time and energy away from the creative work (and the people) we love.

Sidenote: Once you finish, read how 4 freelancers built recurring revenue models that changed their business. You'll love it.

So yeah, if you’re into all that, then you might not want to keep reading.

But if, on the other hand, you’d rather stick around, that makes me happy. Because I don’t like doing those things either.

In fact, I hate it. So much that I’m willing to do just about anything to avoid it.

Including attempting something everyone said was impossible: getting all of my clients from Upwork.

You'll also enjoy this episode of our new podcast...

(Spoiler: They were all wrong. I earned $113,553 in 12 months.)

income

Not your grandfather’s approach to finding clients

I can tell you now that there’s no comparison between the work of “pounding the pavement” looking for clients, and getting them through a site like Upwork.

It’s like being a hunter-gatherer, vs. picking up a bag of groceries at your local Whole Foods Market.

There are a few reasons for this, like…

Upwork clients all hang out in one place

The typical advice for freelancers who need work is to do everything:

  • Blogging
  • Plugging away on social media
  • Cold calling/emailing
  • Advertising
  • Asking for referrals
  • Physically leaving your home or office and meeting people

…all in the hopes that they become clients.

That’s a lot of work for one person to do. And non-billable work to boot.

Contrast that with my approach, which involves literally none of those things.

If I need work, I go to the Upwork jobs marketplace and find it. That’s it.

In my 2.5 years as a freelancer, I’ve never had to do anything else to find gigs.

The following screenshots, courtesy of the “Elance Pulse,” help to illustrate why.

pulse

Look at that volume!

Upwork supplies clients to freelancers like Home Depot supplies lumber to contractors.

This means I can flip open my laptop and connect with 5 potential clients in the time it takes an “off-Upwork” freelancer to get dressed for their next networking meeting.

And unlike social media, blogging and cold prospecting, I’m virtually guaranteed to spend my time talking to the right people, because…

Upwork clients are qualified

By the time they’ve posted a job, an Upwork client has effectively raised their hand and said they’re in the market for freelancing services.

They’ve probably also verified a payment method.

And it’s likely they’ve done a bit of homework and are at least somewhat educated about the services they need.

Some super-serious clients even pony up a premium of $25 to have their job post “featured.” Like this one:

featured

By the way, I won this job at $125 per hour, which was almost 3x the next highest bid.

review

And five months later, not a single week has gone by where I haven’t done billable work for this awesome client.

But the part I really want to draw your attention to is that it took me only 15 minutes to close them by phone after they responded to my Upwork proposal, for all of the reasons mentioned above.

What are the chances of that happening on social media, at a networking meeting, or during a cold contact?

There’s more…

Upwork clients find me

There’s a sweet little Upwork feature that’s not talked about nearly enough: Invite-Only Jobs. (I often refer to this as the “Hidden Upwork Economy,” since these jobs can only be seen by freelancers who’ve been personally invited by the client to submit a proposal.)

These are a thing of beauty, because, when I receive one, it means that a client is already interested in me and my work. In fact, I am often the only person who’s been invited to a given job…meaning I have zero competition.

This can easily happen 10 or more times in a given month, and is a totally passive form of generating leads.

find-me

Notice the client’s opening words in the job post above…

The sales process is basically reversed, with them approaching me and wanting to purchase a block of my time. This deal was practically closed before so much as a conversation took place.

It would take an unmanageable amount of work for a single freelancer to create an online marketing funnel that brings in super high quality leads like this on a consistent basis.

Yet I enjoy this as one of the perks of using Upwork.

In other words, this luxury is a byproduct of the freelance work I already do — rather than a separate “marketing” activity that takes additional time, energy and money.

By now I’ve hopefully convinced you that Upwork is a valid way to make great money as a full- or part-time freelancer, without running yourself ragged looking for clients.

Now let’s talk about some of the strategies I use in order to make this “dream scenario” a reality.

1) I work exclusively on Upwork

When I first started out on Upwork, everyone told me to diversify — that is, to get clients from many different sources — instead. “Don’t put all your eggs in one basket,” they said.

That may be great advice for investors, but diversification just isn’t practical in most other areas of life. I mean I’d love to have a fleet of cars like Jerry Seinfeld “just in case,” but for most of us, the benefits of owning more than one just doesn’t justify the cost.

It’s a similar situation with Upwork and other online freelance marketplaces. These sites reward focus, not diversification:

  • Completing more projects helps you rise in Upwork’s ranking system, making you more visible to clients as they search for freelancers
  • Having lots of positive reviews (especially recent ones) makes it easier for clients to hire you
  • Demonstrating a history of work done on the platform helps you to charge more than your competitors

Yet most freelancers take the opposite approach of dabbling on Upwork. This feels safe, like dipping your toe in the water — but on platforms like Upwork it’s more like shooting yourself in the foot.

2) I present myself as a problem solver

Regardless of how many clients stumble upon your Upwork profile, you’ll never be able to charge premium rates if you don’t position yourself properly relative to your competition.

I’ll explain with a quick story.

I recently hired a new accountant. She charges 3x what my previous accountant charged, despite having identical credentials and services (they’re both CPAs).

Yet I’m happy to pay her a premium, because she positioned herself as someone who could help me strategically structure and plan my business for maximum tax-efficiency, rather than someone who merely “does taxes.”

Presenting yourself as someone who solves business problems gets you several benefits inside of Upwork’s crowded marketplace:

  • Clients are willing to pay more for a freelancer who “gets” their underlying pains, and can make them go away
  • This approach helps you quickly stand out from the crowd when submitting proposals for jobs that many freelancers are applying for
  • It also helps you to tap into the “Hidden Upwork Economy,” as clients are naturally attracted to freelancers who demonstrate the best understanding of their business’ problems

Whenever I run into a talented freelancer who’s unable to command above average fees on Upwork, it’s practically a sure bet that they aren’t presenting themselves as problem solvers.

This is natural, since we’re drawn to freelancing because we love the work. But in order to get ahead of the masses on Upwork, you need to always be thinking from the client’s perspective too.

3) I target the right clients — and keep them

One of the biggest complaints I hear about Upwork is that most of the clients aren’t willing to pay much. But I pay zero attention to most clients. 

Instead, I specifically seek out clients who have successful small businesses, because:

  • It’s likely they can afford my rates (regardless of whether they’ve paid this much to other freelancers in the past)
  • They’ll place a premium value on their own time, so they won’t be the type of client who constantly shops around for a cheaper provider
  • They’ll need ongoing work on a regular or semi-regular basis

That last point is extremely important, because I see countless almost-successful freelancers on Upwork bidding on job after job, day in and day out. Which is a special kind of hell.

You’ve probably heard the statistic: It’s 10x more expensive for a business to acquire a new customer than it is to keep an existing one.

This is twice as true for us as freelancers, since finding new clients doesn’t just cost money, but also time — our most valuable commodity.

Seeking out the right type of client up front — and completely ignoring all the rest — is yet another way that I’m able to earn a great living doing what I love, without having to spend my time hunting and pecking for new work.

Repeat_Business_Percentage_1-243x300

Prospecting is out, connecting is in

There’s this idea out there that Upwork is the ninth circle of freelancing hell. A place where gaggles of evil clients gather to squeeze the blood out of hardworking freelancers like you and me.

A cool story to tell around the campfire? Totally.

But it’s the stuff of urban legends.

Sure, most of the jobs posted on Upwork don’t pay as much as the ones I’ve shown you. But again, I’m not looking for “most jobs.”

And high quality clients — the kind who are happy to pay well for great work — need a lot of care and attention. I can only handle so many at once.

Because of that, I turn down more work on Upwork in a month, than many freelancers accept in an entire year. And I know lots of others who do the same.

This means that plenty of great clients are waiting for you right now.

You may not reach them through advertising, cold emails, or networking…but thanks to marketplaces like Upwork, you can connect with them any time you choose.

Comments? Thoughts?

I’m sure you’ve got something to say because this can be such a controversial topic. Leave a comment and let’s talk!

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About Danny Margulies

Danny Margulies is a copywriter and six-figure Elancer on a mission to help freelancers earn more money. Find out more at freelancetowin.com, and find out how he earned six figures on Elance in just 12 months by downloading his top 5 Elance hacks for free.

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Comments

  1. Title of the article: HOW I built a business on Elance
    Content of the article: I’m super successful on Elance and Elance is awesome

    Not a single word on HOW … But yeah I should download your 5 freelance hacks so you can get another email address. Cheap and unelegant bait.

    • Tamas,
      Thanks for the honest feedback. Danny and I just got off the phone and had a really great chat on how to update the post. We had some great ideas I think you’re really going to like. Danny’s working on it right now. Thanks so much for reading. I’ll let you know when we’ve got the updates. Cheers.

    • Sorry about that, Tamas. As Preston alluded to, based on your feedback I’ve spent the entire day increasing the content in the post by over 70%, all with “how to” content to more accurately reflect the title.

      Also, to prove to you that it was not my intention to “bait” you into signing up for my hacks, you can email me at danny [at] freelancetowin.com and I’d be happy to send you all the hacks without your having to sign up to the list.

  2. Hi
    You are a very good writer for Elance 🙂 but I do not see how the numbers add up.
    15 jobs awarded every 20 seconds = 45 jobs leaving the site per minute
    v.s.: 1,2 jobs posted every minute = 43,8 jobs missing? (per minute)

    w

    PS
    is this a scheme to make people comment? 😛

    • Thanks Walter. I grabbed those numbers off Elance’s site, so I’m not sure how they’re calculated. Though from my own personal experience there are more than enough jobs on Elance to keep a freelancer busy. 🙂

  3. Melody Burt says:

    Here’s another one. It sounds exactly like what I experienced with ODesk. When people will work for $5 an hour how can I compete? I live in the U.S.

    • Melody, I’ve never done any work on oDesk, but I’ve added some content to the post describing the strategies I’ve found helpful when competing against less expensive freelancers (these are likely to work just as well on oDesk, or any similar platform).

      Also, I do know quite a few freelancers who seem to be doing very well on oDesk, including Jake Jorgovan who has been able to earn $1,000 per week there. Hope this helps and gives you some inspiration.

  4. The title of the article “How I built a 6-figure freelancing business on Elance” doesn’t accurately introduce the content of the article. In the article you talk about the fact that you get good business on Elance but you do not describe “how” you do it. So my question is: “how do you earn a 6-figure income on Elance?” not just “do you earn a 6-figure income?” There are obviously steps that you take to do this that give you the bragging rights but you’re not giving us any clue as to how you do that.

    I’m curious as to how someone who doesn’t have a work history on Elance with several past Elance clients to give us little stars and extra points, etc. compete with the freelancers who have multiple jobs under their belt and work out of India for a fraction of what US workers charge. The article here doesn’t support your claim…it only emphasizes it, without aiding the reader as to how they can actually achieve the outcome you have.

    • Tiffany,
      Thanks for the feedback. Danny and I hopped on a phone call as soon as we saw your comments and he has graciously added to the article above. We hope you enjoy the extra content. Thanks for reading!

    • Sorry for the incongruence, Tiffany. As Preston mentioned, I’ve increased the content of the post by 70% (spent many hours on this today) and included actionable advice — I hope you find it helpful.

      To answer your question about how to get the ball rolling without any work history, we all have to start somewhere. Personally, I applied to very small jobs early on, and built up a very small portfolio that reflected the pieces I noticed were most in demand by client who were paying well.

      I can’t really speak to your statement about “U.S. workers” vs. those abroad as this hasn’t been my experience. I’ve met quite a few freelancers from all over the world and I’ve noticed that the rates are all over the place…in my experience it’s usually based on much more than location (skill level, expertise, positioning, attitude/self-belief, previous experience, etc.).

  5. I think what Danny helped to build his business on Elance, is by having several things in order, prior to advertising his services on a site like that. He has a strong portfolio, he engages in social media, his name and his business are well respected in the industry-in short-his name and business name are already out there. Furthermore-by setting his rates at a respectable level, he is showing his potential clients that he is confident enough and established enough to not need to accept low paying projects. To start building a successful business in this field, one may need to start bidding on the “lower paying” projects to get your foot in the door. But, that doesn’t mean you should devalue yourself by working for $5.00 an hour. If your work/services stand on their own-you should not need to. Your job is to convince the future client that your services are worth the fee that one would pay.

    • Thanks Candy. Just for the record, on my first day on Elance I had no portfolio, no website, and no business presence on social media. I did start off with jobs that paid about $15-$20 per hour, but I’d moved past that within a few weeks. You were right on when you mentioned I was confident enough to charge what I was worth. One of the things I did early on was to become a client, so I could see what things looked like from their perspective, and what I found was eye opening. The quality of the services offered by most freelancers really wasn’t that good — this inspired me to go above and beyond, and charge accordingly. 🙂

  6. I’ve been an “Elancer” for several years and I completely agree with your experience! I started by really observing how other people set up their portfolios and replied to job offers. To get my first job, I offered my services at a low rate. It was my client’s first time on the site too and he was thrilled with my experience and helpfulness. I think I made like $6/hr but in the end, I’d learned the ropes of Elancing and got my first glowing review. Things took off from there, and like you I got to the point where clients were inviting me to bid on their jobs (sometimes 5-7 invites per day!). I now have a steady roster of clients (around the world!), and haven’t searched for a new job in a year. I’m not a natural “networker” so Elance has been perfect for me!

  7. I’d also like to add that since my first “low-rate” job, I only accept jobs that are fairly priced and within my rate. I’ll admit there are many people on Elance who are looking for low-priced work, and many, many more freelancers who will accept jobs for ridiculously low rates. The small amount of my time it takes to sift through the low-paying jobs and job invitations has been well worth it in order to find the few serious, honest clients who are eager to pay fair compensation for my expertise and experience. The intelligent, glowing reviews I receive from these clients has led me to receive other high-quality, desirable job invitations. It takes honest, good communication and a little bit of upfront time to get started, but my Elance experience has been very rewarding.

  8. Elance sucks. Like it really sucks. It’s like it was designed 15 years ago and it really needs a policy shake up.

    How am I supposed to compete with a Vietnamese graphic designer if I can’t even link to my portfolio? My portfolio is my chance to wow someone into picking me over the next guy on the list. Simply allowing a designer to upload pictures of their work (in the world’s worst image uploader) does not help them to stand out from the crowd.

    In order to actually get any jobs on Elance I had to break their rules. I sent every potential client a link to my portfolio in the hopes that they’d click on it.

    You’d think that seeing as we’re paying a fee to use the thing that they wouldn’t be so hung up on this kind of thing.

  9. I’d like to say thank you for this, for without you I wouldn’t know what Elance is and wouldn’t have my first job!

  10. Gorgi Jurukovski says:

    178 Hours = $113.000. That’s an hourly rate of more than $600. Yeah, I am sure you can get that on Elance…not!

    • On Elance there are 2 types of jobs: Hourly- and flat-fee-based. They only count hours on the hourly-based jobs, which are a small fraction of the overall work I’ve done. Hence the disproportionate figure.

  11. Wow this was great! Very informative and opened my eyes to the fact that you can actually make a reasonable and fair rate. My little experience and exterior view of “crowdsourcing” sites showed me ALOT of underpaid jobs (many ridiculously so), and some clients would just not pick a finished project so no one got paid. That happened a couple times so I gave up on that one. Now I will look closer at Elance with the things you’ve stated in mind. Thanks again 🙂

  12. Wow, A lot of negative feedback. Danny I thought your post was nice:) I use Elance quite often and have done ok. Not amazing but ok. I not the best at writing a good proposal and try to work on that! You being a writer I am sure helps:) Would love more info on how to write a good proposal from your view.

    • Thanks Austen. When I first started I had never been paid to write, so the writing skills were learned along the way. 🙂

      The number one mistake I see freelancers make when writing proposals is talking too much about their own qualifications and failing to address the needs of the client. The more you can put yourself in the client’s shoes the better you’ll do. Hope this helps.

  13. Thank you, some very good tips on here. I have found some great clients on Elance. I actually have an ongoing relationship with 3 clients there. I would love to add more to that group. I have also come across some very rude, demanding, and unreasonable individuals, so you have to have a thick skin. I think the anonymity of the internet just lends to that to a degree. If you ever do a follow up post, I would love to hear more about how you actually seek out these great clients. You had some great tips on identifying them once you find them, but are you looking at open jobs? bookmarking them under favorites? scanning profiles? looking who others are working for? I would also love to know more about your proposal process and how you vet clients once you are in contact with them.

  14. Paula Spagnuolo says:

    As a freelancer who has being finding a decent amount of work on Elance in the past couple of years I can say that it is in fact possible to find clients willing to pay a reasonable rate but it does take consistent effort and work. When I started using Elance I already had a body of work and took the time to set up a nice size portfolio (including creating mock up designs to fill in where I had some gaps) and took skills tests. I take the time to write proposals that directly speak to the project description and I started out pricing my work lower than I was ‘offline’ in an effort to build a following and reputation. I go above and beyond with clients knowing that when I ask for a review I will be likely to get an excellent one. If you are willing to work at it Elance can be a great source of work but it’s certainly not a cakewalk.

  15. I have been a member of Elance since December ’07 and I have built up a 5 figure lifetime earnings amount. Not amazing, but not bad. I have picked up a few clients who came back to me over the years but I took them straight off of Elance as soon as I was able to.

    Unfortunately I don’t think Elance is a viable marketplace for certain types of jobs. I specialise in publication design and that segment of Elance has been taken over by Indian and Pakistani freelancers who win work by charging next to nothing.

    I used to be able to make quite a decent living off of working for clients on Elance but have not won a job on there in over a year because the prices are just too low from the other freelancers.

    The post is quite comprehensive but still a bit misleading. For instance, I count myself as something of an Elance veteran but the author’s advice of “target small businesses” while good is actually really difficult to do because clients often don’t fill in their profiles properly so its really a stab in the dark as to what clients are willing to pay. Yes, they are “qualified” as far as being able to make the payments…but as far as budgets go, there is very little direction there. Also, for a client to be “qualified” all they need is a verified credit card so really that point does not hold much water for me.

    Clients also don’t seem to read proposals either I have found. I always make sure my proposals are really detailed and set out exactly how I am going to help them, why I would be a good fit etc but then some company from Chennai gets the work for $40.

    Clients also don’t answer questions. Often a client will post something like: “I want a coffee table book designed, looking forward to seeing your bids”. Thats it, nothing else, no information about the page count, how many images, the market, nothing. When I ask about these things my bid is ignored for someone who placed a bid for $120.

    This last point is really where Elance falls down I think, there is very little input and regulation from Elance’s side regarding briefs and how complete they are. There is actually more regulation when it comes to briefs from site’s like 99Design which I find disgusting (I would never use a site like 99Designs). That and the fact that the minimum limit for a job has fallen from $50 to $5 in recent years has made Elance a complete joke.

    Bottom line is: Elance used to care about providers but they just don’t anymore- everything is skewed in the client’s favour. They are only interested in making as much cash from everyone as possible by churning jobs through their system and, while the author of this post has done great and I wish him well, I caution that Elance is not for everyone.

  16. Great Article,
    I’ve also made made 5 figure earning in last 1 year & I believe 88% of my earning is from repeat clients & only 12% are new. You need think & deliver beyond client requirements & in super fast time to build strong business relationships.

    • Thank you Tanveer. Those are great points. Most freelancers don’t realize this but it’s very difficult for high end clients to find excellent freelancers to work with. They would love to have a go-to person they can continue working with on an ongoing basis.

      • Hi Danny,
        In fact the dropping hire rates reflects that potential buyers are not able to or find it hard to select good freelancers to work with on regular bases & freelancer must do something about this…

        • Exactly. Almost every single successful freelancer I know of has a high rate of repeat business. And almost every one I know who doesn’t, is struggling. There’s a lot that can be done to retain clients.

  17. Great article for design. I will use this knowledge in future.

  18. To be clear: I’m talking about the “business” stuff everyone always says we have to do, even though a small piece of our creative soul dies every time we actually do it.

    Prospecting potential clients.
    The “dirty work” of freelancing.

    Not only is it about as much fun as a blistering sunburn, it also sucks our time and energy away from the creative work (and the people) we love.

    So yeah, if you’re into all that, then you might not want to keep reading.

    But if, on the other hand, you’d rather stick around, that makes me happy. Because I don’t like doing those things either.

  19. Ankit Tiwari says:

    Thanks Danny,
    This is quite a useful post!

  20. I’ve used E-lance many moons ago and always had the opposite result, people wanting cheap work $5-$10/hr, competing with 20+ bidders on a job and ended up wasting a lot of time.

    I think it’s awesome you are able to do what your doing. Is your main service Sales Writing on there? Keep up the good work!

  21. I am completely new to elance….as in created a profile but have hardly bid or gotten a client. Are there tips for setting up a great profile and bid?

  22. What do you do (and recommend to do) now that Elance is changing to the less desirable UpWork?

  23. Only recently started om what is now upwork and i can confirm i have to turn down more work than i can carry out. I offer web development services and already ive worked with some cool clients.

  24. Thanks Danny for your posts. I ready it first around 14 months back and had completed around 21 months on elance. That time elance was getting shut down and everything was Upwork now. My annual income in 2015 was around $50k. I read your posts and thought would I ever be able to make it to 6 digits on Upwork! And last week I was actually able to do that. Your tips helped me a lot. Thanks.

  25. This is so helpful Danny,
    I’d not even heard of Upwork till I saw your post but have now signed up!

    Thanks you

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