In the age of the Internet, design services are available at the click of a button. Competitions and websites dedicated to crowdsourced design, particularly logos, are everywhere, and can be tempting as a way to cut costs. Here's why they are more trouble than they're worth:
You put out a basic brief, and then designers all over the world make their own interpretation of it and create logos. There is no discovery process, minimal research, and no opportunity for the designer to ask questions and gain a deeper understanding of the project. Design solutions created from a process like this will be superficial at best—aesthetically pleasing, perhaps, but without real meaning. A back and forth dialogue between client and designer is critical to create a proper brand.
An isolated logo
A logo does not make a brand, and so a mark created in isolation is bound to be weak. A professional designer creates a logo and simultaneously defines the other elements of a brand, so that they all work cohesively and enhance each other. If your logo is created by one designer, and then somebody else has to create the other elements and collateral, they are going to feel distinct and disconnected. Investing in a proper brand to create a solid foundation in the early stages will save you plenty of time and money in the future.
Anyone can sign up on these sites or enter a contest to submit designs, and so the quality of work is bound to be questionable, as you will often be working with designers who don't have much experience. Ultimately, you get what you pay for.
Even if you do chance upon a good designer, those who do this sort of work are working for free—there is no guarantee that they will be paid for their time, and this will definitely affect the quality of service that they provide. They may even submit the same template-based designs to multiple clients with minimal tweaks, as this saves time for them. They are simply looking to increase their odds of being paid—the more logos they design, the better their chances.
It is no easy task to go through hundreds of submissions and understand what they represent before choosing a suitable option. Having too many options can simply create confusion. A dedicated designer may work on multiple concepts, but they generally present a chosen few to you, which they believe are most suitable for your needs. Working in this manner creates a smoother process and filters out the poor quality work that you would otherwise be sifting through.
Many designers consider working for free to be an unfair and unethical practice. Design should be considered a service as valuable as any other, so why should it be provided at no cost? The American Institute of Graphic Arts (AIGA) strongly discourages spec work (work done for free, in the hopes of being paid).
There is no quick substitute for working with an experienced, professional designer. Avoid going with the cheap and easy route, as you will eventually have to bring in an experienced designer to undo the damage.