Freelancer vs. agency - How to make the right choice

Nowadays, many companies rely on external service providers to implement their digitization strategy. This includes, for example, the creation of a website or a complex e-commerce solution. Making the right choice of provider is not always easy, and the question soon arises: Freelancer or agency - which option is the right one?

To make the decision a little easier for you, we have summarized the respective advantages and give you tips on the way, when you should decide for an agency and when rather for a freelancer.

But let's start from the beginning: What is the exact difference between the work of a freelancer and that of an agency?

What is a Freelancer?

One thing right away: From a legal point of view, the term "freelancer" does not even exist in Germany. It is usually used synonymously with the term "freelancer" and describes an activity that is not subject to the trade regulations. In other words, a freelancer offers a service that is of a scientific, artistic, writing, teaching or educational nature. Freelancers or freelancers are self-employed and require a verifiable qualification for this designation. They are also characterized by the fact that they usually work alone and in an individual daily routine.

What is an Agency?

Strictly speaking, an agency is not a legal form either. You cannot register an agency with the Trade Licensing Office. Registering a trade is the only requirement to be able to call yourself an agency. This is also possible as an individual (but only with a trade license). However, since a freelancer works on a freelance basis, he cannot call himself an agency. He has not registered a business and therefore does not have a trade license.

E-commerce agencies offer a relatively wide range of services. As the name implies, such an agency takes care of everything related to your e-commerce solution, from conception to planning and implementation. Our competencies at Latori also include the areas of sales force, web development and marketing.

What are the advantages of a freelancer?

Freelancers are experts in their field and can immediately tell customers what works and what doesn't in direct conversation - while customer contact in an agency often takes place via a project manager. In addition, freelancers work on their own account. Since they usually don't have to finance large offices and the structures are also rather small, freelancers usually do their work for less money than a large agency.

What are the advantages of an agency?

When you hire an agency to provide online services, this usually gives you a single point of contact for multiple issues. This eliminates the stress of having to get in touch with dozens of people to realize your e-commerce project. Although an agency can consist of just one person, it is usually made up of a large number of different employees. This has the advantage that many different specialists are directly on site to handle the order.

Each employee of the agency usually takes over a part of the tasks (consulting, project management, conception, implementation). These specializations can lead to a higher quality of service. In addition, e-commerce agencies can also handle complex orders due to their size. For example, full-service agencies often have a specialist area for SEO, SEA, design, development, etc. If you wanted to cover such a range of services with freelancers alone, you would need many individual freelancers. That would probably complicate communication a lot. It would also be questionable whether several freelancers together could still exploit their cost advantage.

Another advantage of an agency is the order security. If a freelancer is unable to work due to illness or other reasons, someone else must be found quickly. Agencies, on the other hand, either work with permanent employees or are networked with partners of whose skills they are already completely convinced.

In addition, freelancers often have to accept any assignment because they usually earn less. And, of course, every client wants to have the placed order executed as soon as possible. This can lead to a high time burden for freelancers and a poorly executed job as a result.

Last but not least, large agencies that operate as a company, such as a limited liability company, are not required to pay the so-called Künstlersozialabgabe, which is due for freelance creative professionals. This factor should be taken into account in the case of a very large order volume with high invoice amounts.

When should you work with a freelancer?

The arguments for freelancers have already been explained. Does this mean that you should choose a freelancer if you want a good price and appreciate direct contact? Not necessarily! You should work with a freelancer especially if you need a simple to moderately complex solution. In addition, you should choose a freelancer if the end product is manageable and clearly defined.

When should you work with an agency?

However, if you have a large project, the final product does not yet have a fixed form or there is no clear schedule yet, then you should rather hire an agency. The same applies if you are interested in a longer-term collaboration, for example, if text and/or image content is to be created on a regular basis or if you would like specially programmed themes, apps or the like to be managed on a permanent basis.

For a better understanding: An explainer video or the creation of a website are not yet very large projects. By more complex jobs are meant, for example, those in which online stores with a wide range of products are to be built, which additionally require an online marketing strategy and search engine optimization. To perform all these tasks with a very high level, an individual usually does not have the necessary skills, let alone the time.

Due to their distinctive project management, agencies are ideally suited for the conception and implementation of such larger and more complex projects. And although contact with a freelancer is often more direct, agencies are available for a longer period of time and, due to the fact that they are more versatile, are also more likely to be able to advise you on various topics.

Conclusion

So when it comes to hiring either a freelancer or an agency for your project, you have two different doors open to you.

Freelancers are flexible and specialized in one subject area. They are therefore quicker to get up to speed and also cost less. However, as individuals, in most cases they can only take on smaller projects or parts of larger jobs. If a freelancer drops out, you as the client are faced with a problem.

On the other hand, if you choose an agency, you don't have to worry about it. Agencies often shine with security and a well-positioned team. This, in turn, is naturally reflected in the costs. Agencies are a good choice if you want to tackle a larger project, are dependent on advice and want to have a contact person for a longer period of time.

So what is right for you depends first and foremost on the project itself.