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I'm a freelancer myself for mobile apps and also frequently hire other freelancers for my works. Everytime when I make a bid, I receive bids from all over the world. Many of the bidders charge like $10 or even less! The freelancer I have now only charges $7 an hour, and he's happy!!

I personally charge much more than them, thus I'm able to earn a significant margin (get a job and hire someone online to help me). Ok. The quality wasn't the top, but I was able to fill the gaps myself. It worked well for me.

Q: I don't understand why they'd do that, I think they would earn more money in a local supermarket or McDonald? What's the point of waiting for a freelancing job online, and only charge it like $10 an hour?

  • @Scott But not every hour as freelancers need to bid, no guarantee they win. – SmallChess Oct 29 '17 at 15:07
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    You are looking at everything as if everyone was in the US or a developed country. There are a TON of people using those horrible middleman crowdsourcing sites that have no other opportunity for income. – Scott Oct 29 '17 at 15:41
  • @Scott How do you source your jobs? I've (very) limited programming knowledge but am getting better and there's still room for the likes of scheduling web-scraping workflow and automation using VBA in excel and Outlook but like the OP, I find sites like fiver to be crowed and it's hard to stand out – Jeremy Oct 31 '17 at 15:21
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    @Jeremy freelancing.stackexchange.com/questions/2848/… – Scott Oct 31 '17 at 18:01
  • For some people, this is a fortune. Welcome to the World. worlddata.info/average-income.php – Harry Cover Nov 16 '18 at 17:01
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I used to charge around that when I started. I was a student back then, working during the night and studying during the day.

These were my thoughts:

  1. Not Possible to get a job at night where I live, but freelance client were mostly from the other side of the world.
  2. Even though I was sick, I was able to work from my home. Can't get opportunity like that over here.
  3. I save travel time if I freelance. It is a competitive market, so I'll have to charge less than what I generally do.
  4. Places like McD would pay average salary of around $200/500 a month. That is not for me, I have skills to use. Even if I charge less, I can make more.
  5. It is not mainly about the money, I get to work with some foreigner, get to use my skills and actually see someone using it.

What others said is true too, $7 is a lot in some places for some people. Everybody doesn't want to do a job at McD.

You can hire an 2-4 years experienced web developer for around $300/month in some countries.

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Rate of exchange

$10 US = a whole lot more in many countries around the world. The US Dollar is one of the higher rated currencies, along with the Pound and Euro. $1 is often much more than that in other countries. You may be paying $7 US / hr but that may equate to 4 or 5 times (or more) that amount in the worker's country.

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If they are working for you, you are apparently delivering additional value. They may not have the skills, the language or the access to the customers you have so they could not just work there on their own. Also, it sounds like you are taking some responsibility towards the customer. So it makes sense that you get a fair margin for it.

There are several reasons why somebody works for a certain amount, but usually this is, because it is currently his best economic offer.

Could be that McD India only pays the equivalent of 3$/h (I have no idea)

Maybe some are still learning and want to build some experience, so the´ll discount to get some jobs.

Could be that working in a field they like, even at less pay, it is more enjoyable and thus the better option.

... you get the idea.

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The wage disparity is crazier than you might imagine.

I first started hiring freelancers online around 2010, and I was giddy to nearly cover a $5k contract with a $500/mo VA in the Philippines.

That work didn't actually go the way I expected, but I assumed it was a selection problem in how i hired, so I doubled down and moved to Vietnam.

There I found English speaking, technically competent students willing to work for $200/month. (Actually some were willing to work for less, I just didn't realize it.)

I also found savvy individuals who had learned to collect projects online and then outsource them further. So that contractor charging $7/hr may actually hand the work to someone for $1/hr who doesn't have the luxury of speaking English.

From this I learned three things: 1) Differences in cost of living can be 1-2 orders of magnitude.
2) Everything you've taught yourself online, anyone with an internet connection could have learned as well. 3) The same struggles for pricing happen everywhere, they're just at a different level of magnitude. (I had great employees rej

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I don't understand why they'd do that, I think they would earn more money in a local supermarket or McDonald?

Let's look at salary negotiations when interviewing for a job at McDonalds. The manager of McDolands needs to hire a new employee. He first needs to decide what responsibilities he needs filled and the salary range. We'll assume here that he just wants to hire anyone for any position. To do that he must decide what the lowest level is he's interesting in hiring (let's say a student with no experience), and he must decide the highest level he can afford (let's say a previous McDonalds manager).

The manager now has a salary range (hypothetically) of $7.25/hr to $12.00/hr (range found via Google). He won't hire someone for less than that and he won't hire someone for more. He is going to keep this a secret during the hiring process.

When he interviews people he will ask them what hourly wage they want for the responsibilities they're interested in. He will then weigh the value between what they have to offer with what they are asking for. Any candidates who ask for more than $12.00/hr are not hired, and since $7.25/hr is the minimum wage allowed by law. He will reject any candidates he feels are not worth that amount. He will pick the candidate that offers the best return for his wage. Understand, he won't pick the cheapest unless no one else who asked for more was better than the cheapest.

It's that simple, and it also applies to your situation.

I personally charge much more than them, thus I'm able to earn a significant margin (get a job and hire someone online to help me).

You can't hire someone for more than you make and you want to keep some for yourself. This defines your range. Once you know your range you're in a position to look for help, but the range doesn't change the issue of supply and demand.

Ok. The quality wasn't the top, but I was able to fill the gaps myself. It worked well for me.

You managed to yield a return on your investment in hiring that person. That's all it means. You found a way to locate a supply of workers that fit inside your range. If it didn't work out and it cost you money, then you wouldn't be here asking this question.

What's the point of waiting for a freelancing job online, and only charge it like $10 an hour?

You said "online" and that is the fundamental issue here. It also sounds like they announced their hourly rate publicly. Which means, that you ignored the others who were outside your range. There is no negotiations since you know your range and they've already disclosed their rate.

In the game of salary negotiations the first one to show their cards loses. Always!

You might have had enough range to afford $20/hr but instead agreed to $10/hr. That is not your fault. It's the fault of the candidate who didn't understand the game of negotiating. They should have performed some research to see what the general salary range was for the work they were doing.

The other issue here is the use of "hire me" websites where everyone shares their hourly rate. These websites create a stock market economy where "trends" drive up or down the rates. People are charging based upon their ability to quickly find work using the website, and their rates are tightly coupled to the use of that website.

If they walked down the street to their local customer they would negotiate a completely different rate.

These kinds of "hire me" websites become saturated quickly with freelancers who drive down the economy value by overwhelming the population with a lower standard of living. So in layman terms, you get a lot of people from third world countries. While you might not hire people from these regions you are hiring in their online economy. Which means, that local talent are subject to lower rate competition.

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