Here is the video as promised of the new billing features on UniversityTutor.com.
For those just joining us, this represented a big change in the business model. Previously I was charging tutors $10/month to keep their profiles on the site.
With the new business model, tutors can now have a free account, but the client pays a 15% fee on any money they earn. For tutors who use the site a lot and don’t want their clients to have the 15% fee, they can still pay $10/month (for a Pro Account) and then the markup is only 5%. This is similar to the Guru.com business model which I think balances nicely between the free and pro account.
There were a couple important points I wanted to reinforce to the tutors:
The client pays the 15% markup and not you. I stole this idea from odesk.com by the way, and it’s slightly different than how elance.com or guru.com does it, where they charge the tutor.
Clients can only leave you a positive review if you complete the transaction online.
Similarly, your number of hours of tutoring (aka your tutoring experience) will only get updated if you complete the transaction online.
You don’t have to pay up front for “contacts” from potential students anymore. Now, we only make money if you make money - which seems more fair.
Here it the video on Veoh (which has slightly better resolution). Click here if you don’t see it below.
Or if you are international here is the same video on YouTube.
As you can see, it ended up remarkably close to my drawings from a few weeks ago:
I launched the feature this weekend, and sent emails out to about 5,000 tutors explaining the change and how it would (hopefully) benefit them. A handful of the tutors wrote back and were pretty upset about the change (which was to be expected when sending to this many people). But I wrote them back right away thanking them for the feedback and telling them it was still a work in progress and that really using the invoicing was optional for right now. They could still get paid with cash/checks if they wanted - clients just wouldn’t be able to leave them a review after.
Here is an example of one of the emails I got:
While I feel that it is justifiable for the website to make money and operating costs, the website should find another way to make these costs. Advertising to both the potential tutees and tutors could be a much better option. It could include specially directed advertisements based on -info given about potential tutees -Area -Major and area of tutoring (of college students)
Additionally, I am concerned about the method of payment. Would it be through pay pall? That would be bad for me. My students have been very reliable with their checks.
Sincerely, A disgruntled student
And my response:
Thanks for the feedback you make some very valid points! It is still a work in progress and nothing is set in stone yet so we’re definitely taking everyones feedback seriously.
To answer your question, the student can pay via credit card which is more common online, so no, Paypal is not required. In addition, you are not required to use our online payment method at all. If you prefer to keep using checks or cash that is ok with us, and you wouldn’t pay us any markup in that case.
For your current clients it may be easier to just continue doing this. Just keep in mind that to build a reputation on the site (reviews and hours) it might be better long term to transition over, but it is still totally optional, and to be honest right now it won’t make much of a difference since nobody has any hours recorded yet anyway.
But hope this helps and we’ll continue working on it. Thanks again!
Her mood changed instantly when she wrote back:
Thank you for answering my questions. I am actually quite excited about using the online system now!
Success! I’m really excited about it and hopefully it helps make the site much more profitable over the new few months as people start using it.
What do you think? Feel free to send me your feedback in the comments…