7 Tips for oDesk Contractors Working on Fixed Price Jobs

I may not be a staff member nor a veteran contractor on the site, but I do know about the issues regarding fixed price jobs on oDesk.
Some of these issues include no guarantee of payment, non-paying cheapskate employers, and that oDesk can’t really do much about these disputes.
It’s scary, it’s risky, but believe it or not there are positive points to working per project and it is possible to work on fixed price jobs and get paid successfully despite these unfortunate events.

A Never-Ending Battle for Fixed Price Fairness

I visit the oDesk community forums everyday and I see one thread, one comment posted after another, all of which consist of talking, ranting, wailing, and complaining about these same fixed price job issues.
Well, if voicing out these concerns won’t change the policies over this particular job nature, maybe a couple of good tips on how to successfully work and end a fixed price job WITH payment from the employer can remedy the problem for many oDesk contractors.

What is a Fixed Price Job?

The complete opposite to working hourly, a fixed price job is basically working on a per project or milestone basis.
For example, your client has 100 articles for you to do and he’s paying you $10 per article or he asks you to build a website and is willing to pay $400 per 20% completion.  And as a contractor, you are expected to complete each phase of the project, may it be 20 articles per week or 20% in a week’s time.
On the other hand, your employer has the choice to either pay you by milestone, pay you after half of the work is completed, pay you till the entire project is done, or not pay you at all.  The last choice is always the riskiest and contractors will have to decide whether to take them on or not.

The Reasons Behind This Big Fixed Price Issue

First things first, I wanted to know why oDesk offered these fixed price jobs, considering that a lot of contractors are complaining about them and the fact that there are no guarantees.
Here’s what I found:

Based on input from our Community, we believe there are several situations where fixed price makes sense. Employers may prefer fixed price when requirements are: 1) fixed and the project is small, and 2) short-term. Contractors may prefer fixed price when they want to offer employers a low-risk way to try their services. Many contractors new to oDesk and without feedback histories have expressed this view. They believe they are more productive than other contractors and able to earn a higher effective hourly rate by competing for fixed price jobs. We believe in offering choice, and so our Fixed Price option will allow employers and contractors to choose the approach that works best for their particular need.

The oDesk Blog also has a post that talks about working on fixed price jobs entitled Fixed Price Finesse: The Test Run, which includes essential tips for both employers and contractors when dealing with this type of job.

Why Won’t oDesk Guarantee Payment for Fixed Price Jobs?

I’m sure that after knowing that oDesk doesn’t guarantee payment for fixed priced, the first thing you’d ask is WHY.  I myself wondered why they didn’t until I continued reading the thread that introduced this new job option for employers.
Because the work isn’t being monitored by the Work Diary, which is where the screenshots of the work will be displayed, the company can’t pay for the work.  Because they do not see proof of the work, they’re not willing to guarantee payment for it.
Scrolling down and reading the comments, you’ll notice that the announcement received almost more than 20 very long negative responses about it.  ”It contradicts oDesk’s core model”, “Employers are only going to benefit from this”, “We came to oDesk because of the guaranteed payment”, “Don’t allow fixed price jobs” are just a few of the comments and outcries coming from the contractors.
Thankfully, after a couple of months oDesk offered two new features to the fixed price job which are the upfront payment and the milestone payment.
The upfront payment basically requires employers to pay a certain amount before the work begins, while milestone payment refers to payments made after a particular phase of the project has been completed.  These features were given for the contractor to take advantage of in order to protect themselves from scamming employers despite not being guaranteed of payment.

There’s No Point in Arguing About It

It’s 2010 already and the fixed price option is still there. And when you think about it, since it is still an option for employers then it must be working for a percentage of employers and contractors after all.
But there are stories, many stories, about contractors being scammed after being hired for fixed price work that are still flooding the community forums.  Some of these contractors have complained about the employer running away with the work, not responding to their emails, blackmailing them to hand over the work or receive bad feedback, and many more.
In the end, it’s up to the contractor to decide what he should do to lower his chances of being scammed and to protect himself from getting stiffed again.

Tips for Contractors Working with Fixed Price Jobs

After providing two good sources of tips when taking on oDesk fixed price jobs, here are tips for contractors who plan on taking on fixed price but would like to protect themselves beforehand:

• Read the job post. Whether you applied for it or the job was offered to you, analyze the job description, the budget, and the requirements of the job.  If you believe your services to be too valuable to be spent on a $5 job that requires $100 worth of work, you can either negotiate with the employer or simply IGNORE the job post and move on to the better ones.
• Take advantage of the interview process.  If you think you can set the employer straight with his job requirements, do so during the interview phase of the process.  Analyze through the employer’s messages if he or she is really a trustworthy person to work with.  I’m sure any good quality contractor would be able to identify a bad apple when they see one.
• Ask and clarify the terms of the job.  Don’t hesitate to ask for more information about the employer, his company (if he runs one), his niche, and the like.  Also, don’t hesitate to clarify and dictate terms that you would like to implement beforehand such as a 25% upfront payment, 25% payments in milestones, or anything of the sort.  To put it simply, don’t be afraid to tell your client what you expect from him and what you would like him to expect from you.
• Don’t use your newbie status as a reason.  Being a newbie on oDesk doesn’t count as a good excuse to step down and be blind to the red flags waving at you.  You may be a newbie on oDesk, but you are still a professional selling your services to clients.
• Never give up.  If your terms and expectations are scaring employers away, don’t give up.  Always remember that there are many employers out there who can be trusted and understanding, especially if you are patient, polite, and professional enough to explain to him why you would like a 25% to 50% upfront payment for the work.
• Update your employer regularly. Let him know how the work is doing, if payment for phase 2 of the project is due for payment, if he is available, or even just say hello.  Keeping your employer informed and letting him know that he has a project being done will more or less determine if a employer is reliable, communicative, trustworthy or not.  Interviews are just part 1.  This is part 2.
• If the work is completed, ask the employer when he is available to go online and view the work.  Though it is no guarantee that the employer will pay, doing this will assure you that he will be online to take a look at the work, provide feedback and suggestions, which will allow you to work on those changes immediately.  This practice also shows that you are available, are open to changes and suggestions, and are willing to work with him in making the final product excellent.

Do you take on fixed price jobs?  What are your strategies to avoid getting scammed by your employer?