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Euro vs Dollar
Thread poster: sylver

sylver  Identity Verified
Local time: 02:25
English to French
Jun 13, 2003

Charging euros or dollars used to be without consequence, and could be used indifferently.

Nevertheless, the Euro has gone up, is now markedly above the Dollar, and shows no signs of slowing down www.x-rates.com/d/USD/EUR/graph120.html

Of course, this is no problem with my continental customers, but those in the dollar zone are becomming less viable by the day.

After all, we are talking about more then a 10% difference, on top of which bank transfers in dollars are subject to a significant change commission at my bank's
level.

How do you cope with that? Has someone already implemented a double pricing? Or do you expect the dollar to get back in line with the Euro as it used to be?

Any thoughts?


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xxxMarc P  Identity Verified
Local time: 19:25
German to English
+ ...
Client or supplier-oriented Jun 13, 2003

The question is not really whether you invoice in dollars or Euros, but whether you quote prices in your own currency, or the customer's.

The equation is quite simple: quote in your own currency, and your prices - from the customer's perspective - vary. Quote in the customer's currency, and your income - from your perspective - varies.

The policy you follow depends upon which is more important to you: do you want to maintain your income constant in relation to the work you do, or do you want to maintain a constant presence in your customer's market?

To some extent, you can adopt a "buffer" policy whereby you adjust your prices partially to compensate for currency fluctuations. For example, assuming initial parity between the Dollar and the Euro, if the dollar then falls 20%, you raise your dollar price by 10%. That makes you "only" 10% more expensive to your customer, and what you receive "only" 10% less than before. That way, you and the customer are sharing the burden. Halving the differential is quitely likely to produce a price which both sides consider reasonable. The problem with this solution is that you may spend half your time following the currency markets and re-writing your price list.

For new customers, at least, there are good arguments for pricing in the customer's currency. Firstly, the customer doesn't have to do any mathematical acrobatics in order to compare with other suppliers. (The same applies to the method of calculating volume, words, lines, source/target, etc. - use what is common in the customer's market.) Secondly, demand from that market will not be tied to currency fluctuations; and although you will lose income at some parts of the cycle, you will gain at others.

As for bank charges, that is a separate issue altogether. There is a tendency for people to think that the customer should bear all the bank charges, but try suggesting to all the people ordering Trados that they should pay their bank 25 Euros or Dollars for the privilege, and you'll soon notice that people think differently when they ARE the customer. The only winners in that area are the banks. If you routinely get hit with bank charges, you should consider a different solution: perhaps opening an account in another country, or accepting VISA - ask others exactly what your options are here.

Marc


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xxxmedical
English to Spanish
+ ...
in my case Jun 13, 2003

sylver wrote:

Charging euros or dollars used to be without consequence, and could be used indifferently.

Nevertheless, the Euro has gone up, is now markedly above the Dollar, and shows no signs of slowing down www.x-rates.com/d/USD/EUR/graph120.html

Of course, this is no problem with my continental customers, but those in the dollar zone are becomming less viable by the day.

After all, we are talking about more then a 10% difference, on top of which bank transfers in dollars are subject to a significant change commission at my bank's
level.

How do you cope with that? Has someone already implemented a double pricing? Or do you expect the dollar to get back in line with the Euro as it used to be?

Any thoughts?

I have a double change now, a price in dollar and another in euro, I think it is the best way and since now, it has run without any kind of problem.


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sylver  Identity Verified
Local time: 02:25
English to French
TOPIC STARTER
Euro/Dollar Jun 14, 2003

MarcPrior wrote:

The equation is quite simple: quote in your own currency, and your prices - from the customer's perspective - vary. Quote in the customer's currency, and your income - from your perspective - varies.

The policy you follow depends upon which is more important to you: do you want to maintain your income constant in relation to the work you do, or do you want to maintain a constant presence in your customer's market?

To some extent, you can adopt a "buffer" policy whereby you adjust your prices partially to compensate for currency fluctuations. For example, assuming initial parity between the Dollar and the Euro, if the dollar then falls 20%, you raise your dollar price by 10%. That makes you "only" 10% more expensive to your customer, and what you receive "only" 10% less than before. That way, you and the customer are sharing the burden. Halving the differential is quitely likely to produce a price which both sides consider reasonable. The problem with this solution is that you may spend half your time following the currency markets and re-writing your price list.

For new customers, at least, there are good arguments for pricing in the customer's currency. Firstly, the customer doesn't have to do any mathematical acrobatics in order to compare with other suppliers. (The same applies to the method of calculating volume, words, lines, source/target, etc. - use what is common in the customer's market.) Secondly, demand from that market will not be tied to currency fluctuations; and although you will lose income at some parts of the cycle, you will gain at others.

As for bank charges, that is a separate issue altogether. There is a tendency for people to think that the customer should bear all the bank charges, but try suggesting to all the people ordering Trados that they should pay their bank 25 Euros or Dollars for the privilege, and you'll soon notice that people think differently when they ARE the customer. The only winners in that area are the banks. If you routinely get hit with bank charges, you should consider a different solution: perhaps opening an account in another country, or accepting VISA - ask others exactly what your options are here.

Marc

Thanks for your answer. The buffer policy is logical in several ways, but has a serious draw back, as you will have to inform your customers of a price increase anyway (never appreciated), and nevertheless earn less.

The bank charges is not entirely a different issue, because there are 2 separate bank charges, at least in my case:

One charge for the transfer itself -same for Euro or dollar - but also a change commission, which is not present for the Euro.

Thus accepting a parity between the dollar and the Euro means accepting 17% difference in the amount, plus at least a $15 change commission. So, out of a 500 Euros document, there is a 100 Euros loss if you get paid in Dollars. That's a considerable difference.

I have an idea of what I want, and I am very interested to see how other translators are coping with this issue, and with what results (understanding customers, loss of customers, loss of income...)

Thanks for sharing your experiences.

Cheers
Sylvain


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