Pages in topic:   [1 2 3] >
Price transparency
Thread poster: Silvestro De Falco

Silvestro De Falco  Identity Verified
Local time: 08:49
Member (2006)
Italian to English
+ ...
Jun 3, 2008

Recently I asked some participants whether they saw any benefit in having outsourcers communicate to bidders - just the bidders - the price at which a translation is assigned.
My argument was that this would definitely give buyers and sellers of translation services a clear indication of price trends in their language combination, specialty etc.
Replies - when they came - were not satisfactory.
Here I am going to paste an excerpt of an article published by a journal of the International Monetary Fund on how markets work:
"But exchanges are more than physical locations. They set the institutional rules that govern trading and provide the information conduits and clearing facilities through which trading occurs and post-trading activities are completed. An exchange centralizes the communication of bid and offer prices to all market participants, who can respond by selling or buying at one of the quotes or by replying with a different quote. Depending on the exchange, the medium of communication can be voice, hand signal, or electronic message. When two parties reach agreement, the price at which the transaction is executed is communicated throughout the market. The result is a level playing field that allows any market participant to buy as low or sell as high as anyone else as long as the trader follows exchange rules."
I think that price transparency would be beneficial to all: to the buyer of translation services, who through a transparent system indicates whether he is just price-oriented, and to the seller, who would know who are the buyers more inclined to accept his or her bids.
Silvestro


Direct link Reply with quote
 

Patricia Lane  Identity Verified
France
Local time: 08:49
French to English
+ ...
non-commodity Jun 3, 2008

Silvestro,

Perhaps the stumbling block in your proposal is that a translation is not a commodity.

It is not a standardized, mass-produced, predicable item, identical in all respects whether it has been manufactured by company A or B.

Translators are service providers, they do not sell their "product" by the pound or m2. The same text translated by a dozen different translators is going to lead to 12 different translations.

You might want to read the pamphlet "Buying a non-commodity", available on the FIT website (http://www.fit-europe.org/brochures-en.html).

Cheers,

Patricia


Direct link Reply with quote
 

Silvestro De Falco  Identity Verified
Local time: 08:49
Member (2006)
Italian to English
+ ...
TOPIC STARTER
Price transparency Jun 3, 2008

Patricia Lane wrote:

Silvestro,

Perhaps the stumbling block in your proposal is that a translation is not a commodity.



I don't think that's it, Patricia.
Coffee, for instance, is a commodity, yet the price you pay for Jamaica Blue Mountain (about 140 dollar a pound) is quite different from what you pay for Brazil Rio, precisely because quaility varies.
Silvestro


[Modificato alle 2008-06-03 11:33]


Direct link Reply with quote
 

Giles Watson  Identity Verified
Italy
Local time: 08:49
Italian to English
Patricia is right, Silvestro Jun 3, 2008

A commodity is by definition standardized.

Commodity coffee beans are bought and sold as if all types were identical but Jamaican Blue Mountain coffee beans and Brazil Rio trade at different prices because their producers market them as differentiated products with distinctive characteristics and availability.

It's true that many translators sell their work like unbranded coffee beans on price alone. The trick, though, is to convince outsourcers that your translations have more "flavour" and charge accordingly, something that is easiest to do if you specialise.

Good translations are like good coffee: once your clients have sampled them, they won't want to go back to the cheap stuff.

Cheers,

Giles


Direct link Reply with quote
 

Silvestro De Falco  Identity Verified
Local time: 08:49
Member (2006)
Italian to English
+ ...
TOPIC STARTER
Price transparency Jun 3, 2008

Giles Watson wrote:

but Jamaican Blue Mountain coffee beans and Brazil Rio trade at different prices because their producers market them as differentiated products with distinctive characteristics and availability.


Giles,
in my humble opinion coffees trade at different prices because they are different, not just because their marketers say they are different.
The way Patricia put it - and I beg her to forgive me if I misunderstood - was that the principles that make an organized stock exchange work do not apply to a market for buyers and sellers of translation services. I maintain that those very principles are what makes markets, any market, work efficienty. And this place, ProZ, is a market, make no mistake about it.
My main point is that price transparency - i.e. notifying those who bid for a translation project the price at which the project was assigned - enhances greatly the possibility both of outsourcers to attract the candidates they want and of bidders to go exactly for the outsourcers that fit their characteristics.
Let me give you an example:
If I bid 100 for a project and the outsourcer comes back to me saying that it assigned the project for 80, even though the lowest price was 5, I know that this particular outsourcer takes into consideration factors other than prices. So, as a service provider I might start to think, among other things (e.g. a lower budget for that project), that I am pricing myself out of the market because apparently there might be someone out there that is at least as qualified as I am but charges lower prices.
If I have no information, I will inevitably conclude that the job went to the cheapest bidder. The result is that I will no longer bid with that outsourcer, thus shrinking its pool of qualified candidates and depriving me of the possibility to develop a business relationship with a company that - according to my wrong conclusion - goes only for the cheapest price. Is there any other way for companies to let the market know that price is not the only factor?
Prices are a signal and the more we are aware of them the more all the parties involved benefit.
Silvestro


Direct link Reply with quote
 

nordiste  Identity Verified
France
Local time: 08:49
English to French
+ ...
the final contract is private Jun 3, 2008

When the price has to be negociated and agreed between the service provider and the buyer for every translation job, there cannot be "price transparency".

Because the final agreement is a private thing between the two parties.

I am not saying that I would not like to know the final price for some bid sometimes ; but it is simply unrealistic.

On Proz we discuss conditions, rates, etc. in general terms and it is a very good and useful thing to do. Translator's associations offer surveys on average rates in specific countries, as do other economic bodies. Some agencies have a "price list " and say "for EN>FR - commercial - we pay so much and not a cent more".
Thit is all part of the market.


Direct link Reply with quote
 

ViktoriaG  Identity Verified
Canada
Local time: 02:49
English to French
+ ...
A pound of coffee Jun 3, 2008

A pound of coffee, no matter what kind it is, is a pound of coffee any way you look at it. The company who produces that coffee consistently needs and uses the same resources in the same amounts. It also takes them consistently the same time to produce a pound of coffee. Is it so with translation?

No two source texts are alike, unless they come from the same end client, are in the same file format and of the same subject matter, and even at that... So, you can't say that 1000 words of your translation consistently take the same amount of time to produce and consistently require the same amounts of the same resources. It's not even a question of quality. On some projects, my daily output is 800 words, and on some others, it is 3000 words.

As translators, what we sell is not a tangible good, not even a non-tangible service. What we sell is time. I can't imagine time being perceived as a commodity. If it was a commodity, an attorney would have the same earnings as a cotton field worker.


Direct link Reply with quote
 

Patricia Lane  Identity Verified
France
Local time: 08:49
French to English
+ ...
billing time Jun 3, 2008

Viktoria, in case you don't know this rendition of the Bar and Grill singers... take a break for this http://www.youtube.com/watch?v=5TkuZ5oI9uY

The lyrics are so perfect....



Patricia


Direct link Reply with quote
 

Giles Watson  Identity Verified
Italy
Local time: 08:49
Italian to English
Gold is a better example than coffee Jun 3, 2008

You're quite right to say that coffee isn't really a commodity but it's not the article itself that's at issue so much as the way people view it, either as a unique product or a commodity.

Let me just make a couple of points.

The first is that for many translators, rates are not a deal-breaking factor. Many charge on the basis of how much they want to earn and while they may be curious about other people's rates, they have no particular wish or need to know what they are.

The second point is that if you have to bid for projects, as opposed to being invited to do them because the client wants you specifically, then rates are quite likely to be crucial. Bear in mind, though, that other market operators have a right to commercial confidentiality unless they choose to waive it.

The obvious corollary is that your general strategy should be to shift clients' attention away from price and onto the other benefits that you can offer. Take a look at your repeat business and try to work out why it is that clients appreciate you. Then start charging new clients at an appropriate rate. When you have enough business at your new target rate, it won't matter whether the old ones stay with you.

Cheers,

Giles


Direct link Reply with quote
 

ViktoriaG  Identity Verified
Canada
Local time: 02:49
English to French
+ ...
Awesome tune! Jun 3, 2008

Thanks, Patricia! You just helped me add to my arsenal of things to send to people who just don't get it when I tell them what my time is worth!

What a treat!


Direct link Reply with quote
 

Silvestro De Falco  Identity Verified
Local time: 08:49
Member (2006)
Italian to English
+ ...
TOPIC STARTER
Price transparency Jun 3, 2008

nordiste wrote:

Because the final agreement is a private thing between the two parties.


Please reread my original statement about the benefits to buyers and sellers. My proposal is intended to bring more benefits to all the parties involved.
Can you honestly say - indeed demonstrate - that this outweighs the benefit that outsourcers would have by being able to attract the best qualified candidates every time they post an invitation to bid instead of just the low ballers?
Don't you see that once in a while you have new outsourcers that launch plenty of invitations to bid and all of a sudden they disappear?
Do you know why? Because the lack of transparency keeps away qualfied candidates, who think - perhaps wrongly - that the outsourcers only accept low bids.
That creates "adverse selection", i.e. only those who bid low prices stay in the game, with results that are not hard to understand. So after a while these outsourcers disappear.

Silvestro


Direct link Reply with quote
 

Silvestro De Falco  Identity Verified
Local time: 08:49
Member (2006)
Italian to English
+ ...
TOPIC STARTER
Price transparency Jun 3, 2008

Viktoria Gimbe wrote:

A pound of coffee, no matter what kind it is, is a pound of coffee any way you look at it. The company who produces that coffee consistently needs and uses the same resources in the same amounts. It also takes them consistently the same time to produce a pound of coffee. Is it so with translation?


And therein lies the error, the same error that people make when they assume that translators are all the same.
The company you are referring to is called roaster and you might want to know that some of them check their beans through infrared machines to check whether they have reached the desired level of ripeness.
Before reaching that phase, there is a difference also among farmers. Some of them pick the beans one by one, when they are ripe, and others literally pull "root and branch" with machines.
This process is tantamount to the educational process translators undergo. It takes time to make a good coffee, it takes time and talent to make a good translator.


Direct link Reply with quote
 

Silvestro De Falco  Identity Verified
Local time: 08:49
Member (2006)
Italian to English
+ ...
TOPIC STARTER
price transparency Jun 3, 2008

Giles Watson wrote:


The second point is that if you have to bid for projects, as opposed to being invited to do them because the client wants you specifically, then rates are quite likely to be crucial.

My bet is that they are not as crucial as they are made out to be. I am sure that some outsourcers are prepared to pay higher prices. My whole point is that a non-transparent system keeps qualified translators away, leaving outsourcers stuck with the least qualified. I called this adverse selection in another answer.
I agree with you about everything else.
Silvestro


Direct link Reply with quote
 
Margreet Logmans  Identity Verified
Netherlands
Local time: 08:49
English to Dutch
+ ...
You're forgetting something Jun 3, 2008

That is, many jobs aren't negotiated through a bidding proces.
My best paid jobs are the ones people come to me for - because they want me, for whatever reason. So I definitely would not be interested - I know what I'm worth and I don't work for less.
Which means the information gained from your proposal would be incomplete, to say the least. That could have quite a few adverse and confusing effects.

Also, there is no such thing as 'standard of quality'. There are just too many variables in translation - how would you define the quality of what is being sold? No infrared machines here...

If translators would value themselves more, these low-paying jobs and outsourcers would disappear. I don't always agree with what Viktoria says, but this is a point she's been trying to make for a long time: as a translator, you are a professional and you should be treated and paid accordingly. I definitely agree with that.

But you're going to have to stand up for yourself over and over again - no system is going to do this for you. You're going to have to find your own place in the market and not give in to pressure.

@Patricia: love the YouTube link!


Direct link Reply with quote
 

Silvestro De Falco  Identity Verified
Local time: 08:49
Member (2006)
Italian to English
+ ...
TOPIC STARTER
Price transparency Jun 3, 2008

Margreet Logmans wrote:

That is, many jobs aren't negotiated through a bidding proces.
My best paid jobs are the ones people come to me for - because they want me, for whatever reason. So I definitely would not be interested - I know what I'm worth and I don't work for less.


Ok, but what does that have to do with the issue of price transparency?

Margreet Logmans wrote:
Which means the information gained from your proposal would be incomplete, to say the least. That could have quite a few adverse and confusing effects.


Really, how?
Please, let me know. I would not champion any recommendation that would harm someone.


Direct link Reply with quote
 
Pages in topic:   [1 2 3] >


To report site rules violations or get help, contact a site moderator:


You can also contact site staff by submitting a support request »

Price transparency

Advanced search







Protemos translation business management system
Create your account in minutes, and start working! 3-month trial for agencies, and free for freelancers!

The system lets you keep client/vendor database, with contacts and rates, manage projects and assign jobs to vendors, issue invoices, track payments, store and manage project files, generate business reports on turnover profit per client/manager etc.

More info »
BaccS – Business Accounting Software
Modern desktop project management for freelance translators

BaccS makes it easy for translators to manage their projects, schedule tasks, create invoices, and view highly customizable reports. User-friendly, ProZ.com integration, community-driven development – a few reasons BaccS is trusted by translators!

More info »



All of ProZ.com
  • All of ProZ.com
  • Term search
  • Jobs