Different pricing models
The first major factor to consider when selecting your FMS provider is the primary pricing model - what does the platform cost and how this is cost calculated.
In the main, there are two main pricing models:
Transactional pricing models
The transactional model works by applying a fee to a repeatable process. Some examples of a transactional pricing are:
- Paying to post projects
- Paying a fee to handle freelancer invoice payments
Organisations who use a very small number of freelancers infrequently benefit the most from transactional pricing models. In some instances, the transactional fee is applied to the freelancer's side of the transaction (e.g., deducted as a service fee) so can be virtually free to the organisation.
The major negative with transactional pricing is that this model doesn't reward scale or high-volume users. As soon as your organisation starts to use a moderate number of freelancers or engages regularly in projects, the transactional costs can start to stack up.
Transactional models are normally accompanied by other revenue models, like premium fees for technical support.
License-fee pricing models
As the name implies, the license-fee model is based upon charging a fee for use of the platform. License-fee models are very popular amongst software-as-a-service products because they offer you, the end customer, simplicity and as usage increases the effective 'transactional' cost decreases.
The most common type of license fee pricing model you'll find with Freelancer Management Systems is 'price per user' - in other words the number of administrators and hiring managers wishing to access and use the system.
The price is simple and doesn't go up as the number of 'transactions' increases. A license fee is also usually inclusive of other associated or implied services like technical support.
For organisations who use freelancers very infrequently, there may not be the full opportunity to get the most value out of a regular license fee.