July 13, 2011: Upcoming changes to bidding!

Image: nuttakit / FreeDigitalPhotos.net

Update 8/23/2011: This change has been rolled live and we'll post the official announcement about it tomorrow.

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We've listened to your feedback and will be making two changes in the next release regarding bidding and escrowing.  This will be live on the site soon (anticipated the middle week of August) and will be announced (as usual) on siteupdates.vworker.com.


1) Workers:

As many have requested, the vWorker fee will no longer be deducted from your worker bid. Instead, it will be added to the amount you bid.

That may sound confusing to some, so here is an example.  With the current site: let's say you want to receive $85 on an open-aucution pay-for-deliverables project.  You would not type in $85 as your bid, because the vWorker fee is deducted from it at the end, and you'd receive $85 - 15%...less than what you wanted.  Instead, you would use the bidding calculator, and it would tell you to bid $100 ($85 + the vWorker fee).  After we deducted our fee, you would receive the original $85 that you wanted.  This is quite a bit of calculating work for you to do, for something that's fairly simple (especially when you have to do it over and over again).

After the change, it will be much easier.  If you want to receive $85, you simply bid $85.  Behind the scenes, vWorker will add the vWorker fee to your bid and show that to the employer ($100 in the example above).  So from the employer's point of view, it looks the same ($100 both before and after).  But from your point of view, it's much easier.  There will be no more calculating and no more guessing when you bid.  You simply receive what you bid: plain and simple.

2) Employers

From the point of view of an employer, there will not be much of a change.  In the above example, the current site will show a bid of $100, and after the change, employers will still see a $100 bid.  However, there will be an additional feature for employers that will potentially allow them to escrow less money than they currently do.

Currently, many employers do not take advantage of an easy way to reduce the fee on every project by 16%, by simply using something called a preferred payment discount.  When an employer pays via a cheaper method for us to process (check, wire, or ACH), we pass the savings on as a discount.  You would expect a  majority of employers to use this feature.  However, with the current site bidding method, many employers don't really "see" it, and so never really think about the fee.  As a result, few take the small extra effort required to use it.

However, after the change, the way the employer escrows will change slightly, and the preferred payment method will be able to be used to reduce the amount the employer needs to escrow.

Let's use the same example as above where the employer escrows $100.  The new bid acceptance screen will give the employer two options:

a) Escrow the full $100 (for credit card and paypal)
b) Escrow $100 - the 16% preferred payment discount (for snail mail check, ACH, and wire)

So unlike currently, employers will actually be able to deposit *less* money up-front if they choose a preferred payment method!  In these tight economic times, that will be a welcome thing. And being able to see the benefit up-front will give many employers the extra incentive to take advantage of the preferred payment discount in the first place, and benefit from the savings.

3) Other

This next release will also have 20+ other new features, including the ability to respond to vWorker emails via email and other heavily requested items!  Check out siteupdates.vworker.com for the latest information.

4) More information

Here is a preview of some of the new FAQ items regarding the bidding changes that will go out in the release:

44) How did bidding and the vWorker.com fee change in July of 2011?
	Prior to July of 2011, bidding and the vWorker.com fee* worked like this (on an open-auction pay-for-deliverables project with 15% fee): Worker wanted to be paid $85. Using the bid calculator on the bid screen, the worker calculated that they should bid $100, to take into account the vWorker.com fee*. The worker bid $100. Employer saw the bid as $100. Employer selected the worker and escrowed $100. Employer accepted the work as completed. Worker was credited with $85. vWorker.com was credited with $15. After July of 2011, the same scenario works like this: Worker wants to be paid $85. On bid screen, the worker is instructed not to raise their bid for the vWorker.com fee* anymore, because we will do it for them instead. Worker bids $85. Employer sees the bids as $100 (the vWorker.com fee* is now included at this point). Employer selects the worker and escrows $100. Employer accepts work as completed. Worker is credited with $85. vWorker.com is credited with $15. In both scenarios, the employer pays the same amount, and both the worker and vWorker.com receive same the amount. However, after the change, it is much easier for the worker to place their bid, because they did not have to calculate the fee. And the entire project is much more likely to enjoy a 2.5% discount on the fee, from a preferred payment method. That’s because the discount was formerly not applied/noticeable until after the employer released the funds. And at that point, most employers probably didn’t even notice it was occurring. However, now the employer sees the effect of a discount during escrowing and it's very apparent that they can save significantly by paying this way. So this allows the entire project to be done cheaper. *vWorker fee*: This example uses 15% as an example, but in actuality, the percent ranges from 6.5% - 15%, depending on the type of project and method of payment. Both “prior” and “after” the 15% fee is calculated as 15% of the entire escrowed amount (i.e. worker credit + fee). If you reverse-calculate this as a percent of the worker’s bid, the amount is 17.xx%
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45) Has the vWorker.com fee gone up since the July of 2011 bidding change?
	No, it has not. For example: on an open auction, pay-for-deliverables project, it has been (and remains) 15% of the entire escrowed amount. In both scenarios, this percentage can be reverse-calculated as a percent of the worker’s bid at 17.65%. (Click here for more information on forward and reverse percentage calculations.) Note that this 15% is just an example fee used here. It can be reduced significantly by using a preferred payment method, a different payment method, or auction type. Click here for a list of all the possible reductions.
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47) How did bonuses change after the bidding change in July of 2011
	Employers did not see any difference after this change. Before the change, they would post $100, we would subtract a 6.5% or 10% vWorker fee, and the worker would get the remainder. After the change, it works the same way.