These top 6 marketspaces viz. Guru.com, Elance.com, LimeExchange.com, Rentacoder.com, Getafreelancer.com and oDesk.com, together capture about 90% marketshare (based on the revenues reported by them), the rest being taken by smaller sites (scriptlance etc) and niche / skill specific sites (Joomlance, 99designs etc).

For ease of comprehension, I have tabulated the features offered by these top 6. I will build up on this review in another post by writing about how to enter a freelance marketspace as a newbie.

	Guru	Elance	LimeExchange	Rentacoder	Getafreelancer	oDesk
Rank	1	2	3	4	5	6
Membership	- Basic (Free)- 2 levels of paid	- Basic (Free) - 3 levels of paid	- Basic (Free) - 3 levels of paid	Free	- Basic (Free) - 1 level of paid	- Basic (Free) - 1 level of paid
Profile	Overview, Resume, Skills, Education, Experience, References, Photos, Videos, Portfolio	Overview, Resume, Skills, Education, Experience, References, Photos, Videos, Portfolio	Overview, Resume, Skills, Education, Experience, References, Photos, Videos, Portfolio	Resume, Skills (2 fields only)	Overview, Skills	Overview, Resume, Skills, Education, Experience, References, Photos, Videos, Portfolio
Project Fee	Fixed	Fixed	Fixed	- Fixed - Hourly	Fixed	- Fixed - Hourly
Skill Testing	Yes	Yes	Yes	Yes	No	Yes
Project Types	- Open- Invite Only - Guru Vendors only (highest paid plan) - Geographical Region specific (others can bid though)	- Open - Invite only - Select Providers (highest paid plan)	- Open - Invite only - Vantage Members (highest paid plan)	- Open - Invite only - Geographical Region specific (others can’t bid)	- Open - Invite only - Gold Members (highest paid plan)	- Fixed - Hourly
View Buyer History	Yes	Yes	Yes	Yes	Yes	Yes
HTML in bid proposal	Limited tags	Limited tags	No	Yes	No	No
PMB	Yes	Yes	Yes	Yes	Yes	Yes
Bid Limit / month	- 10 (Basic) - 100 (paid)	- 3 (Basic) - 20 to 60 for paid members	- 10 (Basic) - 100 (paid)	Unlimited	Unlimited	2 to 20 per week
Payment Mode	- Invoice - Escrow	- Invoice - Escrow	Escrow Only	Escrow Only	- Invoice - Escrow	- Invoice - Escrow
Fee Calculator (Gross & Net Fee)	No	No	No	Yes	No	Yes
Commission	- 5% on invoice - 7% in escrow	6.75% to 8.75%	4% to 8%	15%	- $5 / 10%  (whatever is higher) - 0% (Gold)	10%
Project Agreement (with milestones)	Yes	Yes	Yes	No	No	No
Bidders Visible	Yes	Yes	No	No	Yes	Yes
Average Bid Amount Visible	No	No	Yes	No	Yes	Yes
Minimum Bid	$25	$30	No minimum	No minimum	No minimum	No minimum
Arbitration	Only escrow	Only escrow		Yes	No	For Hourly Projects Only
Payment Withdrawl Options	- Check - Bank Transfer - Paypal - Payoneer	- Check - Wire Transfer - Paypal - Payoneer - ACH	- Check - Wire Transfer - Paypal - Payoneer - Moneybookers	- Check - Wire Transfer - Paypal - Moneybookers	- Wire Transfer - Paypal - Payoneer - Moneybookers	- ACH - Wire Transfer - Paypal - Payoneer - Moneybookers
Unique Features	- Simple interface - Package deals - Proposal templates - Work Room	- Pioneer -Keywords for search results depends on  member type	- Coupon codes for hosting etc from Limedomains - Payment from other sites considered for ranking	- Thorough buyer verification		Desktop App to log hours worked

I would love to hear what you think about these sites and ofcourse this comparison.

What is a Bid Proposal?
Bid Proposal or just proposal is an offer by the service provider or freelancer in response to a project s/he is interested in working on. Usually the mandatory components of a bid are: the bid amount (hourly or fixed), the proposal and time to complete. Other things like attachments (for sample) are usually optional. It thus follows that the differentiator (in your bid) is the proposal.

So here is how to write a proposal which will stand you a greater chance in winning the bid.

- Read the Project Description. Before you begin writing the proposal, read the project description in detail and any associated files to understand the requirements. Obvious, isn’t it? But in my experience as a service buyer (and I have posted more than 170 projects), more than half of the bidders just don’t read the requirements. There is nothing more annoying than having to waste time discussing a project with freelancers who have not understood the requirements. The description will give you an idea of how much effort is required and hence the amount to bid. Is this amount within the budget of buyer? If not, are the project returns worth the effort? Are there any implicit requirements (e.g. I want a standards compliant website will mean different things to different clients)?

- Do your homework. This is where you try to read the project buyer’s mind. The buyer may post link/s to website/s he likes, or a lawyer may have given a sample data entry for contact info of accountants, or a consultant has given some logo concepts she has in mind…you get the idea. View the links, samples etc and if a small sample or design comp can be given in short time of say, 30 minutes, do it and attach it with the proposal. This will instill confidence in the buyer about you.

- Tailor the Proposal. As a buyer, I just delete meaningless bids like “I can do it” or 900 word long templated proposals. If they don’t have time for my project bid, I don’t have time for them. Period. Moreover, no employer will go through lengthy proposals for a low budget project (< US$ 250). As a freelancer, you must appear interested in the project; this is done by addressing the requirements and may be even recommending an alternate solution or pointing out some discrepancies. Tell them how you intend to program that software, or what camera you will use to get those photographs and other resources which you will use for the project.

- Provide details of Relevant Skills and Experience. Instead of tooting your entire resume, just mention those skills that will be advantageous to the employer’s project. When listing experience, for instance don’t send a list of 20 websites you have designed, if the requirement is for WordPress blog. Just 4 or 5 of your best projects will be enough to gauge your ability. Be careful of sending data (e.g. Research Reports) that may be confidential. If in doubt ask the past clients.

- Answer Employee Questions. If there are any. Preferably bullet point them to separate each of the responses.

- Mention Deliverables. Be very explicit here. Specify what the deliverables entail e.g. logo in JPEG, GIF and CDR format or research article with online references only etc. If the buyer does not understand some aspects, take it upon yourself to explain them – this will save you a lot of frustration later and possibly even avoid arbitration or unpaid invoices.

- Cost and Payment Terms. Specify whether the bid price is tentative (to be confirmed say, pending certain clarifications) or final, fixed / flat or hourly and the currency. Try and convert it into the approx local currency of the buyer (http://www.xe.com/ucc/ is a good converter). Then mention the payment schedules / terms – escrowed amount to be released at which stages of the project e.g. 25% at the beginning, 40% at alpha stage and balance when the software is delivered. Also mention what out of pocket expenses may be required to be reimbursed (stock photos, music etc)

- Time Schedules. Inform the buyer as to how much time this will take. If the project can be broken into various stages, do so. e.g. first website design comp within x days, changes to the design within y days (for each change), slicing the design (upon approval) within z days.

- Last but not the least. Greet the buyer; if he writes his name at the end of project description, do use a simple “Hello Greg” or “Greetings Mr. Smith”, rather than “Hey There!”. On the same line, please never use slang or SMS or such language- leave out all “gr8″ and “lol” for your forum posts. Use simple language that focuses on the buyer and his project. And yes, do check for any typos.

This might seem a long bid proposal, but once you put it into words, it will be just under 350 words. Ofcourse very small projects (like making a form work or touch up an image) merit a not-so detailed proposal.
Each project buyer will receive many proposals. And one of the reasons s/he is outsourcing the project is to save time. So it is logical that s/he may not have enough time to read all 900 word proposals. Make yours stand out.

1. Not portraying yourself as a business person. If you are interested only in pocket money, this attitude may be fine. But, if you want higher income and better ratings, then you must play the role of a businessman or businesswoman as the case may be. This will instill confidence in the hirer as s/he understands that the stakes for you in the project are high as well and you are serious about your reputation. You will thus stand a higher chance of winning projects.

2. Incomplete Profile. Ask all hirers and they will tell you that given all things equal, they will most likely award a project to a person whose profile is updated. Profiles not only contain a brief about yourself / your company, but also your experience, skillsets, portfolio, payment terms etc.

3. Unrealistic Profile. Some freelancers give an impression that they are experts in everything from logo design to HTML and dozens of programming languages to internet marketing and SEO. “Stuffing” keywords might land a prospective client during search results, but will certainly put them off. Its logical that one person can’t possibly be doing all thats written. So just tell the truth and you will stand a better chance.

4. Low Bid. When one begins freelancing, a low bid amount may be alright for one or two projects in order to win the project and thus obtain a rating. But once you have completed some projects, ask for what your work is worth. And its certainly not rude if you need to ask for more if the project scope changes in between.

5. Sketchy Bid / Proposal. Don’t just say, “I can do it in 3 days.” Instead, take time to read the project description, view the links / references if any, and then present a proposal which gives an understanding of the project / requirements as also your plan in achieving the objective. Moreover, specifying payment terms, estimated timeline and deliverables will remove any ambiguity and will also be useful in case the project runs into arbitration.

6. Communication Gap. If you have any questions before bidding on a project, it is good to ask. Even during the course of the project, don’t shy away from, say seeking clarifications and recommending a better alternative. Keep the employer informed regularly on the status of the project. Always thank your clients for the project and the rating. This will go a long way in forging a business relationship. This is also a good opportunity to let them know about other services that you provide as also your contact details.

7. Shy about asking for review / rating. After the project is completed, go ahead and ask the client to rate your services as it will land you future projects. If required, go to the “Help” section of the website, copy the URL to the relevant entry and send it clients who don’t know how to go about rating. This will help them do it faster and will also leave a positive impression on them.

8. Missed Deadlines. Procrastination, low energy or just plain bored with the project? You should consider the “don’t feel like getting out of the bed” factor in the schedule when you bid. Eat the right foods that don’t leave you tired, drink lots of water (a cup or two of coffee is okay), listen to your favorite music (my personal best practise), walk / exercise, and take 10 minute breaks after every 2 hours. This way you won’t dread going back to work on that project.

9. Wrong Project Choice. The Pareto principle (or the 80-20 rule) in business states that 80% of your sales come from 20% of your clients. So don’t say yes to every project that comes your way. Decline low paying but effort intensive projects politely – better if you can refer them to some of your friends who will be happy to do it. Treat valuable clients – those who hire you again and again at the right price – like VIPs. In the same note, avoid clients that cause you stress. Those extra dollars are not worth it if they will be used to buy Aspirin.

Here’s how it works:

How Online Freelance Marketspaces Work

1. Bidding Stage. Registered buyer posts a project (e.g. Web Design for Restaurant) with detailed description, budget, deadlines and other conditions or even questions. Registered freelancers / service providers places bid on the project with fees, payment terms, project proposal, experience or list past projects done, perhaps some samples and turnaround time.

2. Project Discussion Stage. Buyer and freelancer/s discuss the requirements and other details before awarding / accepting the project. e.g. buyer may ask some questions regarding the features required or the freelancer may have a query regarding the buyer’s deadline. As a freelancer, you must clarify all aspects to avoid frustrations and wastage of time later.

3. Project Award Stage. After reading all the proposals and discussion, the buyer has finally decided to go ahead with a freelancer and awards the project to her. The selected freelancer accepts / rejects the project. Some sites like Guru.com require you to upload a contract / agreement before you ask for the money to be paid into escrow.

4. Escrow Stage. Escrow works by placing money in the control of an independent and licensed 3rd party (in this case the freelance marketspace)  in order to protect both buyer and freelancer in a transaction. When both parties verify that the project has been completed as per terms set, the money is released. If at any point there is a dispute between the parties in the project, the process moves along to dispute resolution. The outcome of the dispute resolution process will decide what happens to money in escrow. Simply put escrow protects the interest of buyer as well as the freelancer. This is not mandatory on some sites like Guru.com, which allows the freelancer to invoice the buyer after project is completed, payment of which is not guaranteed by anyone.

5. Work in Progress. The freelancer gets on the job and provides feedback to the client / buyer about its progress, perhaps sends drafts / comps along the way for approval.Buyer may ask for changes or could enhance the scope of the project midway – this may / may not attract additional cost.

6. Project Completion. After the project is deemed complete by the freelancer s/he uploads / sends via email or other means, the project deliverables (website files, article in MS Word etc). The buyer, after review of the deliverables, may request some changes / amendments or enhancements before finally accepting the project as complete.

7. Payment Release. The buyer releases the payment in escrow or pays the invoice as might be the case.

8. Rate / Provide Feedback. Here the buyer as well as the freelancer provide feedback on each other and rate them (usually a 5 star or 10 point system). This is vital for the freelancers in bagging future projects as employers will in most cases will look at your ratings first.

The exact process might vary to a degree for some sites. Be sure to read and understand before you begin on that marketspace.