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Another rate reduction, but agency expects more jobs to come in
Thread poster: Marion Rooijmans

Marion Rooijmans
Netherlands
Local time: 07:45
English to Dutch
+ ...
Jan 21, 2009

Hi all,

I've read through quite a lot of posts about the recession in general and agencies asking for (or simply forcing) lower rates in particular, but I couldn't find any that are similar to my situation.

One of my clients sent an email (not addressed to me in particular, just 'Dear freelancer') about how the current financial situation and the pressure from their clients forces them to reduce the rates. They propose a new rate (a reduction of 11%, and their rate is already the lowest among all my clients) but state that this new rate will benefit both me and them. It will give them more jobs and they will give preference to all translators who accept this new rate above those who don't. Furthermore, they're looking for an extra reduction of 5% for jobs of over 10.000 words.

My first reaction was 'No way'. Then again, their jobs amounted to 13% of my income in 2008 (and 3% in 2007). Perhaps I should tell them that I am keeping my current rate, but will apply a 11% discount if, at the end of the year, the total amounts to the 2008 total + 11%?

All suggestions welcome, thanks in advance.


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Benno Groeneveld  Identity Verified
United States
Local time: 01:45
English to Dutch
+ ...
Words don't get cheaper by the kilo, Jan 21, 2009

but I understand why you're hesitating.

Maybe you can have them sign a contract that they'll raise the rates when the economy gets better (and agree on some outside economic index as an indicator).

Otherwise you'll just have to bite the bullet and decide whether you want to continue working with them, or you're going to spend your time looking for new clients who pay more (they ARE out there!)

Unless, of course the work is easy, just flows out of your fingers and into the computer, so you won't even notice that they lowered their rates.


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Lawyer-Linguist  Identity Verified
Portugal
Local time: 06:45
Dutch to English
+ ...
Jan 21, 2009



[Edited at 2009-01-21 14:55 GMT]


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KSL Berlin  Identity Verified
Portugal
Local time: 06:45
Member (2003)
German to English
+ ...
Don't fall for this nonsense Jan 21, 2009

Tell them you'll be kind enough not to increase your rates for a while as you had planned to do, but do not cut them. Living expenses haven't gotten any lower as far as I can see, and if they are at the bottom anyway, they are a good candidate for replacement. If the agency is unable to compete based on quality and service it probably doesn't have much of a future anyway.

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Angela Dickson  Identity Verified
United Kingdom
Local time: 06:45
French to English
+ ...
"but"? Jan 21, 2009

Marion Rooijmans wrote:

One of my clients sent an email (not addressed to me in particular, just 'Dear freelancer') about how the current financial situation and the pressure from their clients forces them to reduce the rates.


I think you should only consider this if you are short of work. If you're generally kept busy by other clients at better rates, tell this agency so. They are, in effect, competing for your services, and they need to know it.

The fact that they're openly telling you they'll favour translators who accept the rate reduction over those who don't should tell you something - that they will put price ahead of quality if necessary.

As this is just a general email I'd be tempted to ignore it, and carry on invoicing at your normal rate until they approach you personally. Then if it were me I think I'd tell them to take a running jump...


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Aniza  Identity Verified
Malaysia
Local time: 14:45
Member (2007)
English to Malay
+ ...
An extension to what have been discussed... Jan 21, 2009

I hope this link works, and if it does, it may bring us to do some thinking... and hopefully those TAs out there too...

http://www.simpleology.com/blog/2009/01/shocktails_episode_1_the_only.html


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FarkasAndras
Local time: 07:45
English to Hungarian
+ ...
rather... Jan 21, 2009

Marion Rooijmans wrote:

Perhaps I should tell them that I am keeping my current rate, but will apply a 11% discount if, at the end of the year, the total amounts to the 2008 total + 11%?


If you would like to get more work for them even at the reduced rate, perhaps you should calculate your 2008 monthly average and tell them you are accepting the rate reduction as long as they provide a steady flow of work... at least 110% (125%, 133%, 150%, whatever) of the 2008 average each month. Do your sums at the end of each month and see if they hit the mark. Gentle coercion like this might just work on the PMs who are under pressure from the management to thrust the reduction down translators' throats...


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ViktoriaG  Identity Verified
Canada
Local time: 01:45
English to French
+ ...
Getting emotional can ruin business Jan 21, 2009

Sadly, many agencies think that by lowering their rates in such hard times, they will win over their competitors' contracts. It's as though they were thinking that lowering rates will magically increase the demand for their services (which is totally absurd). However, I have noticed a trend here, and that means that there is not only a handful of agencies who have this philosophy.

If a quarter of the agencies worldwide adopt this method of staying afloat, then other agencies will eventually be forced to follow suit. So, practically everybody will eventually lower their rates - and the competition will still be in the same state as it is now (no increase in workload). Back to square one. So, the not so smart agencies will again lower the rates, thinking that they didn't lower them enough the first time. A vicious circle. In the end, we would end up with major general rate decreases, and some translators will have to look for another job. Well, not if I can help it...

I think it is unwise to help small-minded agencies stay afloat by supporting their rate decreases. Translators would only be creating their own misfortune.

Although it seems that translation spending worldwide will somewhat suffer this year, the decrease in the volume of work will be minimal. If most companies spend sensibly the same amount as last year despite having less money in their pockets, that means that they do need those translations. If there is a need, then rates are safe - unless unprofessional agencies, who are scared to death by the current economic context, do some very clumsy things about it and ruin things for the rest of them, and by extension, for us.

Just say no. And in the meantime, I think now is the time to go and do some prospecting. If you find a few new clients, you will have clients to replace this one by, in case they don't take no for an answer.


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José Henrique Lamensdorf  Identity Verified
Brazil
Local time: 04:45
English to Portuguese
+ ...
Set up a mileage plan Jan 21, 2009

I have no idea on the market rates and the demand for your pair.

If you are willing to offer them some discount, and they are wielding a carrot of a large job, you can tell them that every month, for instance...

- beyond the 5,000th word they get a 2% discount
- beyond the 10,000th word they get a 4% discount
- beyond the 20,000th word they get a 6% discount
- beyond the 40,000th word they get a 10% discount

To make round figures, let's say you charge 10¢/word, and they've ordered a 50,000-word translation from you within one same month.

They would pay:
first 5,000 words @ 10¢ = $ 500
second 5,000 words @ 9.8¢ = $ 490
next 10,000 words @ 9.6¢ = $ 960
next 20.000 words @ 9.4¢ = $ 1,880
last 10,000 words @ 9¢ = $ 900

Total = $ 4,730 hence avg. 9.46¢/word. So you'll have given them actually a 5.4% discount.

Now that you know how it works, check your figures:
- how many words per month would you think it's likely and interesting for you to translate for this agency.
- if that were accomplished, what would be the actual discount you'd be willing to give them
... and set up your mileage plan. Then show them how it works, reminding that the count is reset to zero at every 1st day of the month, or one week after your last pending job delivery. It will be your plan, do whatever you want with it.


Don't hang to promises.
An outsourcer offered me a job. He said his usual translators' rates were 40% cheaper than mine, but he'd settle for a 30% discount with me, and would have some 30k words from the same client thereafter. I visited his end-client's web site and, honestly and without bragging, the translation quality there was visibly worse than mine. So I thought that maybe that end-client had never seen anything better, and decided to give a promo discount of 30% on the first (small) job. However I wouldn't keep that offer for the big one, if it came my way. If they want my quality, they should pay my price.
(Epilogue: Payment problems led me to discard that outsourcer altogether, regardless of rates.)


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Williamson  Identity Verified
United Kingdom
Local time: 06:45
Flemish to English
+ ...
Niche language Jan 21, 2009

Dutch is a niche language with in comparison to the bigger combinations like Spanish--English, German-English a limited number of translators available
Unless a Dutch native lives in India or China or unless a Chinese has grown up here and went back to China, the translation can not be outsourced to India or China. Most translators live in countries where the cost of living is high and most say no to lower rates. So, if you refuse, nobody is eager to hop in at a lower rater. With French>Dutch the number of translators availabe vs. demand is even smaller.

[Edited at 2009-01-21 18:08 GMT]


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Samuel Murray  Identity Verified
Netherlands
Local time: 07:45
Member (2006)
English to Afrikaans
+ ...
They're just hoping... Jan 21, 2009

Marion Rooijmans wrote:
They propose a new rate (a reduction of 11%, and their rate is already the lowest among all my clients) but state that this new rate will benefit both me and them. It will give them more jobs and they will give preference to all translators who accept this new rate above those who don't. Furthermore, they're looking for an extra reduction of 5% for jobs of over 10.000 words.


Well, it's fairly obvious that they're struggling to get clients, and they've decided to offer a lower rate in order to get more business. It's a gamble but it may work. However, they can't offer lower rates to their clients unless their freelancers haven't already agreed to lower rates. Nothing dishonest about it.

Also, read the fine print: they're giving their clients an 11% reduction not to get *more* business but simply to maintain the previous level of business. So by not reducing their rate, they'll get less jobs. When they say to you "more jobs" what they really mean is "more jobs than you would have had otherwise", and not "more jobs than last year".

As for the 5% discount, I fully understand the argument that words don't get cheaper when delivered in bulk, but on the other hand, bigger jobs can be useful to have when business is slow.

If you're looking for a way to justify it to yourself mathematically, here's one way: suppose they make up 20% of your income next year, and suppose you give them their 16% discount, and assuming you don't give similar discounts to other clients, then your total income for next year will be slightly over 3% less than it would otherwise have been.

Of course, if one ship can cross the Atlantic in six days, then six ships can cross it in one day, right? Statistics never lie.


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Sara Senft  Identity Verified
United States
Local time: 01:45
Spanish to English
+ ...
I agree with Kevin Jan 21, 2009

Before I read your post, I said to myself "Ridiculous." They are trying to trick you.

¡Cuidado! (That means "caution!" in Spanish.)


Kevin Lossner wrote:


Tell them you'll be kind enough not to increase your rates for a while as you had planned to do, but do not cut them. Living expenses haven't gotten any lower as far as I can see, and if they are at the bottom anyway, they are a good candidate for replacement. If the agency is unable to compete based on quality and service it probably doesn't have much of a future anyway.


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Geoffrey Barrow
Local time: 01:45
Norwegian to English
What about those of us who haven't increased our rates in years? Jan 21, 2009

I have also received a request from one of my more sporadic clients asking me to cut my rates by 10%. They try to mitigate this by claiming that they (the agency) have been cutting their rates to the end clients and giving them discounts for years without reducing the amount their freelancers are paid. Perhaps I am simply suspicious by nature, but I often wonder if agencies who require discounts from freelancers based on the infamous "Trados scale" actually pass on the savings to the end clients (many of whom know nothing about Trados)?

Kevin Lossner wrote:


Tell them you'll be kind enough not to increase your rates for a while as you had planned to do, but do not cut them.


Good idea! I have yet to decide how to react to my client's request, but I wonder if I should point out that my rates have not gone up in almost five years?

Cheers,
Geoff


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Kerati Kuaimongkol  Identity Verified
Thailand
Local time: 13:45
Partial member (2007)
English to Thai
I would say no Jan 21, 2009

If the client is your lowest rate, it is good for replacement. It may suffer you in short term, but If you accept this trick, it will suffer you in long term.

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Tina Colquhoun  Identity Verified
Local time: 06:45
Danish to English
+ ...
Another possibility... Jan 21, 2009

How do you know that anything they say is true? Maybe they're not in financial trouble. If they have 50 translators on their books and they send out that e-mail (which costs them nothing) and 10 translators agree to an 11% cut - it's a nice little earner. Even if one translator agrees, they've gained something.

Don't buy it.

Tina


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