This article was published by Micha Kaufman, Co-founder and CEO of Fiverr on the Forbes blog.Google “freelance negotiation” and you’ll be inundated with pages of tips including how to get higher rates, not be intimidated, and avoid angering clients. Haggling fills independent workers with such dread that The Freelancer’s Union devotes a blog post to The Art of Negotiating, assuring its members, “negotiating should (and can!) be like playing a friendly hand of poker.”These comforting words are necessary. I can’t tell you the number of times I’ve heard freelancers asking precisely what language to use once they’ve begun the negotiation process. They’re scared to death of losing client prospects to competitors who are willing to work for next to nothing.And rightfully so. In the bidding process, price is the focus and buyers are incentivized to go for the lowest rate rather than quality. Given the globalization of the Gig Economy, this means that a designer in the U.S., whose rate is $50 per hour is bound to be passed over for a counterpart in India, who charges $5 per hour. And the Global Recession certainly hasn’t helped matters. When times are tough, the market becomes flooded with competitors.On the buyer side of the coin it’s no better. The internet is filled with negotiation advice for those looking for services: perform thorough market research, look for creative solutions within company resources, know when to walk away, etc. There’s no doubt that hiring talent is a time-consuming, handwringing, and complex endeavor for busy business owners.
We entrepreneurs (buyers and sellers alike) have long assumed that negotiation is a must when contracting for Gigs<sup®. On a daily basis, we spend a ton of our precious time, resources, and energy on creating requests for proposals, the proposals themselves, crafting bids, making counter-offers, and managing this process. What if there was a way to cut out all of the haggling?
Think back to the ‘90s. That’s when Saturn revolutionized the auto industry with “no haggle” prices. Given that bargaining and car buying had gone hand-in-hand ever since autos were first mass-produced in 1910, this was a game-changer.Customers loved not having to spend their Saturdays sweating it out and arguing over dollars on showroom floors. In J.D. Power and Company’s annual survey of dealership satisfaction, Saturn was the first non-luxury nameplate to score highest (unseating Lexus).But that’s the car industry. How about services? Is it possible to upend the negotiation norm in the same way? Save us all some blood, sweat, and tears (not to mention tons of time and transaction costs)? Allow everyone to focus on the work itself? At Fiverr® we are doing just that. On our platform, services are packaged as Gigs with set prices. The seller decides how much or little to include in each Gig. The buyer decides which Gigs to purchase based on fit and user reviews. As sellers get more customer accolades, they can offer their Gigs at higher prices. In other words, merit is everything and the focus is squarely on the seller’s quality.Our model is closer to eBay or Amazon than other freelancing sites which host the bidding process. Buyers are essentially purchasing a fixed-price Gig or product. Price ends up playing second fiddle to quality, instead of the other way around.As the labor force of new entrepreneurs, which we call the Gig Economy, grows exponentially, it’s crucial that cheap labor doesn’t rule the day. When we get paid our worth, when hiring and working is simple, fast, and frictionless, that’s when we can all concentrate on creating amazing things — together.
