How to Make Money Doing Data Entry and Data Encoding Online


How do you make money entering data into forms? You can sign up for a freelance data encoding or data entry project. Many companies require people with basic English skills to take data in one form and convert it into another form. A lot of times, companies have all sorts of data from different sources that follow different formats. This can be a serious headache if a company is trying to convert all of this into a unified body of data that can be put in different databases so their applications or software could make use of that data very efficiently.

Why do companies hire data entry freelancers? Can’t they use software?

If only software were as intelligent as human beings. A lot of data entry jobs don’t require all that much thinking, but this is misleading because a human being with very little skills is still smarter than top-of-the-line software. This is definitely true when it comes to data entry work.

Many companies have different forms of data. Maybe they have data in the form of pictures. Perhaps they have encoded material that they scanned and turned into pictures. These follow different formats because they were created at different times. While there is optical character recognition technology and all sorts of sophisticated scanning technology, these are not up to the job, because for software to work, that data input or sources of data have to be predictable and standardized. This is the pickle too many companies find themselves in because they gather all sorts of information produced at many different time periods.

Prior to the Internet, companies would record and keep information in microfilm. A lot of companies would take pictures of different documents. Some companies would reduce that information into software data. It would be great if all these records prior to the rise of the Internet were in the soft form, but they’re not. This is why there is a demand for data entry specialists.

What about modern demand for data entry work?

It’s easy to understand that you will always have a job for data entry if you are dealing with information that was produced in the 1950s, 1960s, all the way to the mid-1990s. That much is easy to see, but let’s face it; given enough data encoders located throughout the world, as well as an increase in sophisticated software, it’s only a matter of time until that work pool dries up.

Is there any demand involving data produced closer to our time? The good news is yes. Different companies have different formats, and unfortunately it’s not very easy to convert one format to another. At the very least, people are needed to train software to accurately and efficiently convert one format into another. This is where data entry specialists and data encoders come in. You’re not exactly tasked to convert all the data. That’s not your job. Your job is to work with the data long enough to adequately train the software that will do the heavy lifting.

This is the big difference between traditional data entry work and modern versions of data entry tasks. You’re not going to be reduced to grunt work. This is mindless work. You’re probably going to get frustrated because you’re doing the same thing repeatedly, and there is very little thinking involved. There is definitely no creativity. The good news is, you can work with software to train it, so that’s where your creativity comes in. You’re basically coming up with all sorts of ways to be as efficient as possible in training the software. See the difference?

Thanks to software, we can say good-bye to old-fashioned data work

A lot of people could remember the days when whole floors of office buildings were occupied by people with very basic data entry jobs. How basic? Well, they read a document, and they type out the contents of that document. This is mind-blowing because now, we live in an age where there is sophisticated optical recognition software that can basically scan all these materials, and turn that info into software data. It’s able to do this at a clip of hundreds of pages per minute. This is mind-blowing that you need actual flesh and blood human beings’ hand typing the stuff in. As fast as human beings are, they are no match to sophisticated software.

Thankfully, you don’t see this kind of work anymore. There are still data entry specialists and encoders, but their job is essentially to work with software, so the software has all the parameters it needs to actually do the heavy work. Of course, this means less people. Since human beings are not actually the ones entering all this information into a standard form, there’s less need of them. Previously, you would need whole floors of people typing in data directly into software. Now, you may need a handful of people working with test data and formats to train software, and eventually the software will take over.

Since Data Entry work is essentially just training software, does this mean that all Data Entry online jobs are short-term jobs?

Not necessarily. It’s easy to see the short period required for manual data training work. Eventually, the assignment will dry up because there are only so many data forms and structures to work with. Once you’ve covered all of that, the software will take over. The good news is, a large chunk of the data work currently available in a freelance basis are custom jobs.

For example, somebody who publishes online has many different notes, and they would need somebody to take all those notes, collate them, tag them, categorize them, and send them back. Most people could do that. Most freelancers could easily tackle such projects.

Another common category of data entry involves images. There are a lot of websites out there who process a tremendous amount of images, and unfortunately they can’t keep track of all these pictures. Somebody has to step in and tag these pictures, so the software these companies are using can do a better job managing all these images. Again, freelance data entry people can do a wonderful job image sorting.

Finally, when it comes to social media, there are a lot of marketing companies that need data entry people to do basic analysis. They would take all sorts of hash tags, and try to pair it with the most appropriate category of pictures. This is not grunt work because this directly impacts how effective these agencies or companies’ direct social media marketing campaigns will be.

How much does Data Entry and Data Encoding work on the Internet pay?

It all depends on the type of project you are assigned. If you are tasked with training some piece of software, chances are you are going to get paid a fairly decent amount of money. We’re talking about $5 to even $10 an hour. It depends on how long the project is and how much data sets are involved. Of course, the more complicated the data and the more numerous the data sets, the higher the pay.

What is the downside of doing Online Data Entry and Data Encoding work?

The most common downside is the duration of work. Basically, companies that require this type of work will set a fixed deadline and a fixed set of tasks. Once you have hit the deadline, and you finished all the tasks, you’re done. Maybe they will give you another batch of work, but if you’re training software, chances are they’re moving on. You have to scramble and find another project, otherwise you’re going to be floating between freelance jobs for quite a long time.

A lot of freelancers don’t have a problem with this because they have secondary skills. Primarily, they do data entry, but they also write or they do graphic editing and Photoshop on the side. By being a jack of all trades, they ensure that they are at least working on one freelance job after another. Of course, this is not fool proof, because depending on how market demand goes, there may be very little demand for your skill set in a particular part of the year. If that happens to you, you’re out of luck, unless of course, you have a day job.

How to find Online Data Entry and Data Encoding work

If you’re looking to enter data or tag images, categorize images, and that kind of thing, you’re in luck. This type of freelance task is actually quite popular on the Internet. There is always somebody needing some kind of small project done. Maybe they’re lazy. Maybe they’re unmotivated, or they just don’t know how to do it. Regardless, they’re looking for specialists who can work with this data and can handle it very quickly. Here are the most common places you can find data entry work:


Fiverr used to restrict contractors to $5 per project. Now you can charge whatever you want. Here’s the problem with data entry work on Fiverr: It’s a dog-eat-dog market out there. It’s a buyers’ market. This means that there are a lot of people like you who can understand English instructions under-bidding each other.

In the United States, the federal minimum wage is $7.50 an hour. Unfortunately, if you’re going to be doing data entry work, you probably are not going to have much of a shot, because there are people located in the other side of the planet who would work for a fraction of that hourly rate. It is a race to the bottom. Still, I mentioned Fiverr here because if you run out of other options, and you just need to get paid today, advertise your online data entry task for $5.


With that said, please understand that Fiverr only gives you jobs to the point where you get good reviews. If one of your clients is unhappy with your performance, there is a strong chance that the orders will stop. Fiverr is very depended on reviews. You have to protect your good reviews. It is not shocking to discover that a lot of highest rated freelancers at Fiverr maintained their top rankings not because they’re very good, but because they quickly refund clients who are even close to complaining. I’m not talking about people who are actually complaining or who are ticked off. I’m talking about clients that are somewhat dissatisfied. That’s how proactive a lot of freelancers are.

However, here’s the problem: If you are just working for $5, and it takes you 15 minutes to an hour to produce data entry work and end up refunding, don’t be surprised to discover that your actual per hour rate is way below five dollars. I’m throwing this out there, because you can’t come into Fiverr with all sorts of unrealistic expectations. It doesn’t work that way.


Another great source of freelance data entry work is Upwork. I recommend Upwork for intermediate to advanced data entry freelancers, because the kinds of projects, you get there tend to be bigger. Moreover, a lot of the companies that advertise freelance projects on that platform equip their data entry remote staff with software. Basically, you’re not left with some sort of freeform reporting system. Usually, you are given an interactive form that you could fill in following a certain format.

The big disadvantage of Upwork is the competition. I’m not talking about Fiverr type competition where basically people just underbid each other. It’s worse than that. A lot of companies will not touch you with a 10-foot pole even if you are going to work for a fraction of the next guys’ rate. Why? They’re looking for quality. They’re not going to screw around. They’re not going to take a gamble with somebody who is untried and un-proven. You can no ball your prices all day, every day, but very few companies will take you up on your rates. They know better. They understand that if something is very cheap, there are two things going on. Either that person is training and is otherwise good, or the service sucks.

Considering the fact that many of these companies are serious companies with big budgets and are intent on actually producing topnotch materials, then it’s easy to see that they don’t have the time to screw around with a freelancer who is new to the game. What I’m trying to say is that if you are just new, you’re going to have to wait a long time to establish enough credibility for you to get a steady flow of work from Upwork, that’s the bottom line.

The Workaround

The good news is, there is a workaround. Seriously. When you take on many different projects on Upwork, try to get one client, and when you get that one client, treat her or him like royalty. Over-deliver. Deliver quickly. Deliver to the highest quality standards. If you do this, chances are that person will come back and give you a great review. It doesn’t mean all that much in a big scheme of things because that’s just one client, but if you make it a point to over deliver and produce the very best-quality output, your reputation will perceive you, and you will get more and more work.

It all boils down to quality of output. Don’t look at Upwork or any other freelance platform as some sort of job source. This is where a lot of freelancers screw up. They think that they are doing the client a favor by offering their service for cheap. No. You have to look at it the opposite way. They are doing you the favor because nobody has heard of you. You are untried and unproven. Even if you are tried and proven, you really can’t let it get it to your head, because you’re only as good as your next job. So it’s a good idea to focus on quality on upwork and really guard your reputation, because that’s why you separate yourself from the rest of the people, bidding for jobs on Upwork and getting nowhere.


One of my favorite guerrilla ways to get online jobs is through LinkedIn. There are a lot of LinkedIn job listings, pay close attention to job listings that come really close to the kind of online data entry work you’re interested in. If the listing is about 60% to 80% there, look up the company. Find their decision makers on LinkedIn. Ask them questions. Get their attention, and then direct their attention to the fact that you do this type of work.

Here’s where it gets dicey. A lot of them will just blow you off. They won’t even respond to your social media messages as well as your emails. However, there are some out there that will give you a shot, but here’s the rub: They are only going to check you out if you do some sort of trial for free. Do you see the two hurdles that you have to clear? I know this is kind of a hassle, but think of it this way, when you’re trying to meet a member of the opposite sex at school or at work, it’s a numbers’ game. For every 100 people you ask, maybe a handful would be interested, and of that handful, maybe one is serious. That’s just the nature of the beast.

So do yourself a big favor when you’re doing LinkedIn outreach, target hundreds. Now here’s the problem: you can’t just send out the same message to all people. That’s bad. They’re going to call you out on it and don’t be surprised if you get banned. You have to do each outreach in a custom way. You have to mention them by name. You have to demonstrate that you know something about their company, and you basically just want to get a conversation going. If you’re able to do that on a massive scale, chances are, the kinds of leads that you will get are of higher quality than if you just spammed away. Of course, this takes quite a bit of time.

The Awesome News

Here’s the awesome news. If you do this correctly, you only need to connect with maybe three or five remote clients, and you are basically good to go. Put simply, they’ll just keep coming back to you, and you have enough work to replace your full time job or to give you a more flexible job if you’re not currently employed.

The Secret to Freelance Data Entry Success

As you can tell from the description above and the tip, there are certain secrets that a lot of struggling data entry freelancers simply don’t know or don’t want to know, one of them is massive outreach. Let me tell you, if your grand plan is just to advertise your services on Fiverr and hit Upwork, you’re playing to game to lose. If you really want to win, and you want to score the higher-paying clients, you have to hit LinkedIn. You have to check out and pay close to those job descriptions and offer yourself. You have to take the initiative.

The great thing about all of this is when you do custom outreach, you get paid more because you call the shots. You’re not another face bidding downwards for a job. This takes quite a bit of effort. You’re definitely going to get rejected a lot, but as long as you’re able to take it on the chin and keep pushing forward, you’ll be able to land those five clients that will take care of you really well.

The second secret to Data Entry freelance success would blow you away

I know you’re probably thinking, “Okay, great! I have five clients that will pay me the same amount of money that I’m making at my day job or maybe more. What’s the big deal? I’m still working for somebody else.” You are absolutely correct, because if you are freelancing, you are trading your time for money. The only difference between the nine to five job that you have is you no longer have to report to a cubicle. You no longer have to hassle with the traffic, but you’re still trading your time for money because you have to be in front of your computer doing work so you can meet the deadline.

It doesn’t matter whether you do it at the beach or the Starbucks cafe, or at your girlfriend or boyfriend’s house. You’re going to have to do the work because you’re trading in your time for money. You just have more flexibility when you’re a freelancer, it feels better, but at the end of the day; it’s still the same-old client. Here’s the secret to get out of this: Be a middle person.

That’s right! Find people who would do data entry work for you and pay close attention to their quality. Train them. Make sure that they produce output that meets the minimum quality standards of your client consistently. Once you are able to find these individuals, you can basically assign them your work and keep a percentage.

Once you’re doing your LinkedIn outreach, you can get more and more clients, so eventually you get several full time incomes worth of revenue, and all you’re doing is farming out work. You’re not getting your hands dirty. You’re not doing the actual grunt work. Sounds awesome? Well, this is called arbitrage. If you live in a developing country, you can find a lot of people who would do data entry work for close to zero money. Turn around and sell that labor to your clients.

Follow this rule of thumb when doing Arbitrage

If you’re doing digital labor arbitrage, follow this rule of thumb. I learned this the hardest way possible. I wanted to be fair to people that I hire to do freelance work, so I would basically just double what I’m paying them. If I’m paying somebody $3 an hour, I just charge my client $6 an hour, that’s how I would price my service. Here’s the problem. People are people, and they do screw up from time to time, and guess what happens? The clients will see the mistakes. They will ask for a revision.

Here’s when things get nasty. Once they ask for a revision, there goes your profit. You thought you had doubled the amount of money you are paying your contractor? Well, if your customer keeps coming back for a revision, your profit goes up in smoke. Do yourself and the people under you a big favor. At least triple their rate. This way, there is still some cushion for the unexpected. This is a crucial secret that you don’t want to learn the hard way.

The bottom line with earning online through Data Entry and Data Encoding work

You can definitely earn quite a bit of money as a freelance online data entry worker. You just have to get the right clients, and eventually you just have to farm out the work. This is what separates people who are just barely getting by and people who work less and make more money. It’s all about arbitrage or being a middle person.

The great part to all of this is that you’re helping people with families put food at the table. At the same time, you’re delivering solid value to clients by having a fixed quality standard. There will always be a need for middle persons, but it can be a headache, especially when you’re starting out. People flick out all the time. Clients can be unreasonable, so you really have to have a thick skin to be able to pull this off. When you do, it’s a beautiful thing.

If you’re looking for many other ways to earn money online, click here for my blog post on 25 methods that require very little money to make money from the Internet.

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