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Minimum rate (just like ebay.com) has to be established
Thread poster: Eleftherios Kritikakis

Eleftherios Kritikakis  Identity Verified
United States
Local time: 04:14
Member (2003)
Greek to English
+ ...
Sep 28, 2004

It used to be $0.14/word, or even more. Seven (7) years ago. What happened? What happened and now we have to wait 10 more years for the prices to go to $0.14 again?

Something very simple:

In the past, bidders were not able to actually find a lot of translators (they were not even “bidders” back then). Now, they do. That’s good. Up to a point. Now, I, as a bidder, will post an offer for a job. I say “you guys bid your expertise and price and we’ll see”. Will there be AT LEAST one or two “desperate” translators? Yes, they will. In order for them to get the job no matter what, they will make a desperate offer, at a very low price, ignoring the time and quality they have to invest on the job. The bidder will never want to pay more...

That’s how the price war started:
a) Because translators NEVER had a sufficient marketing plan and platform (hey, car prices have also “fallen” comparatively, but car companies are richer than ever!). In essence, translators were never business people, and now that they need to be business people, they do not know how.
b) Because translators rarely cooperated with each other on the pricing issues. They started competing with each other through proz.com and other sites, in order to “outsmart” the other translators. Result? Their income was lowered! (what a business success, indeed, to lower your income!).
c) Because there is not one authority or agency out there which will protect the translator’s legitimate interests. The translation community must be the only one in this solar system with 95% of its member losing money at a steady rate, despite the fact that the volume of translation jobs has increased dramatically over the last 10 years (EU, Globalization, opening of the former soviet markets, etc.).

I would ask from proz.com to mobilize its people and source and try to put an end to this. You see, when you buy something at EBAY.com, there is a “minimum reserve” price that has to be met, in order to ENTER the bidding process. Why not a “minimum rate” that will protect the translation industry, and give the opportunity to good translators to bid as well? Why not? Don't you guys want your earnings to go up 100% with just a small thing to do?

Thank you very much

Lefteris Kritikakis
Chicago, IL


[Subject edited by staff or moderator 2004-09-28 18:49]


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Kathinka van de Griendt  Identity Verified
Local time: 12:14
Member (2004)
German to English
+ ...
Thank you! Sep 28, 2004

Thanks for a push in the right direction!

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Henry Dotterer
Local time: 05:14
SITE FOUNDER
Staff has no intention of instituting technical mechanisms Sep 28, 2004

The idea of mandating a minimum rate has been discussed previously. At times, the suggestion has been made that site staff institute some form of technical mechanism to dictate minimums.

To head off this topic from moving in that direction, I would like to state clearly that ProZ.com has no intention of instituting a minimum rate mechanism in the near future. Here is why:

(1) Even if it were conceptually possible and advisable to set a minimum rate, we would not currently have a means of enforcing it.

(2) Whether attempting to set a minimum is legal or not is an open question, and not one on which we have had adequate advice (comments from lawyers to me would be welcome, via my profile)

(3) Other sites have attempted to set minimum rates, with no apparent effect. (again, comments via my profile would be welcome)

It is in the interest of translators, and ProZ.com, for rates charged to be consistent with the demands of our challenging profession. To that end, we (as staff) welcome and encourage legal communication and cooperation among translators. But we believe that control of rates does (and should!) reside in the hands of service providers.

That said, please carry on with this topic.

(By the way, minimum rates set on eBay are set my members, not by eBay.)


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Jussara Simoes  Identity Verified
Brazil
Local time: 08:14
English to Portuguese
+ ...
been there, done that Sep 28, 2004

Eleftherios Kritikakis wrote:

It used to be $0.14/word, or even more. Seven (7) years ago. What happened? What happened and now we have to wait 10 more years for the prices to go to $0.14 again?

[Subject edited by staff or moderator 2004-09-28 18:49]


Hi,

All I can say is "been there, done that". What did I get?
I could be poetic and say:
"I've had my share of sand kicked in my face..."

Oh, well...

XXXXXX
JPS


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asil
Local time: 07:14
English to Spanish
+ ...
Market rules Sep 28, 2004

I fully agree with Henry in this case. Market rules shall always govern the industry, and I'm very surprised that you, as a Chicago resident, have been tempted to control prices of goods and services (Russians tried to do it for 70+ years and look at what they ended up with).
But think the other way, too. If you were a lawyer (a similar profession, in the sense theya re also basically freelancers), would you like someone else to tell you how much you should earn on a specific job? On what grounds should that fee be based? If a lawyer is more productive, why cann't he/she pass on that productivity advantage to his/her customers?
Price control has been tried by various societies before, and none has succeeded. I will always try tom maximize my income, but I would definitely never abide by price control of my profession. If I could live in Ivory Coast as a millionaire by charging US$0.01 per word, I would do it. My customers will be very happy and my pocket will enjoy it. If we are going to play the globalization game, you must accept that people can find ways to reduce thier costs and offer better rates than yours. Hopw do we cope with that? By constinuously improving our services, and adding more value to them. That way, my customers never would look for anyone else.
I hope this opinion does not hurt anyone's feeling, but I'm a firm advocate of free markets, regrdless if they are good or bad for me. My beer bill is decreasing every day because of competition in the local market, and I am the first one there to enjoy it.

Best,

Sergio


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Fabiana Papastefani-Pezzoni  Identity Verified
Romania
Local time: 12:14
Member (2003)
English to Albanian
+ ...
Quality preserves the business, IMO Sep 28, 2004

Hmmmmm, who wouldn’t like to preserve and increase the incomes. See, every body knows that a brand new 2000 USD car can hardly be a great one. Yeah, that could be the first car of a 16 years old girl, and not a new one. God forbidden, though, the cars’ (computers, cameras, home appliances) prices didn’t drop. Dear colleagues, I am not saying “Thanks God, translation prices are dropping, too”, who could I. But just like the cars’, computers, cameras, home appliances prices has dropped due to market demand / offer, I do not think the translation prices have dropped cause of some desperate translators. For as much as the cars prices will drop, one wanting to buy a good car will never pay less then, say, 9,000 Euro for e new car (at least in Europe). Hope I explained my self enough.

Fabiana


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Jussara Simoes  Identity Verified
Brazil
Local time: 08:14
English to Portuguese
+ ...
to asil Sep 28, 2004

asil wrote:

>But think the other way, too. If you were a lawyer (a similar profession, in the sense theya re also basically freelancers), would you like someone else to tell you how much you should earn on a specific job? On what grounds should that fee be based? If a lawyer is more productive, why cann't he/she pass on that productivity advantage to his/her customers?



At least in Brazil there is OAB (Brazilian Bar Association), they DO have a minimum prices list. Nobody will ever care about the highest prices, because the sky is the limit, but they have to charge a minimum price, minimum enough to preserve their occupation dignity.

XXXXXX
JPS


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sandhya  Identity Verified
Local time: 15:44
Member (2003)
German to English
+ ...
How do you define minimum? Sep 28, 2004

Hi,

This issue has been bothering me since a long time too!
Based in a country like India that is perceived as a "lower rate" country, I am often asked to lower my rates just because I happen to live here.
If we want to welcome globalization, then I think the location of a translator hardly matters, only quality and professionalism does!

Anyway, as has been said above, what is minimum in one country might well be maximum in another!
Ultimately, as Henry suggested, rates must be firmly handled by the service provider. It is tough, but each provider must learn to be strict about "his/her" rates.

cheers
sandhya


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Henry Dotterer
Local time: 05:14
SITE FOUNDER
A method of calculating your minimum rate Sep 28, 2004

Sandhya wrote:
It is tough, but each provider must learn to be strict about "his/her" rates.


I think that is the key. What has been working as far as rates go is education. It helps when our experienced members provide new members with a method to work out a minimum rate.

Some have advised this method:

(1) Work out what you need/want to earn per month. (The amount should be high enough not only to live, but also to take holidays and save for retirement/rainy days.)

(2) Next, figure out how many hours per month you can fill with paid projects.

(3) Divide your target income by working hours to get what you need to make per hour.

(4) Figure out how many words you can comfortably do per hour (on an ongoing basis.) Allow for breaks.

(5) Divide your target hourly rate by the number of words you translate per hour. This gives you your minimum price per word.

I think Jonathan Hine wrote about this in more detail. It should probably be written up in a Howto... any volunteers?


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Parrot  Identity Verified
Spain
Local time: 11:14
Member (2002)
Spanish to English
+ ...
By Jonathan's definition, 'minimum' will always be subjective Sep 29, 2004

I have his book.

"We may calculate our minimum price anytime, but we should do so at least whenever major chamges occur in our financial situation or expectations".

"There are other considerations in setting out prices, such as the difficulty of the work, the demand for our particular service, and other market-based factors. These are beyond the scope of this book. However, because of these considerations, we should keep our individual minimum prices to ourselves. It is not the sort of number we should place on the Internet or in our advertising. The minimum should be something less than the lower end of any range we do publish or advertise." -- Jonathan Hine (Boldface is mine).

This is very personal accounting, Henry. Ask me to cost a multilingual conference for 5,000 people and I'll come up with solid figures (i.e., that's easier). But the principles that everyone takes into account for setting rates are really each individual's concern.

The principles of costing a conference may be helpful, though. As Jonathan puts it, "We are really selling time-based units of our expertise". (Jonathan's work, How to Set Your Price and Other Tips for Freelancers, approaches the question from the individual translator's point of view).

Following are the assembly-line figures.

Conference organizers estimate that each translator on the team is worth at least 6 hours of peak performance a day at 500 words per hour (we discount breaks since we try to create conditions that increment that work-hour capacity, in case we have to use them overtime; i.e., they have to enjoy their work). And overtime is paid at 150%.

We expect 1,200 words an hour from a revisor. Within which the Canadian Translation Bureau adds the standard of an average 3 corrections as optimal. (I.e., 1,200 words with more than 3 corrections is already harder work than usual).

Don't you all look at me like I'm a freak. This can be, and in an in-house context, IS organized like an assembly line. It just takes discipline to implement. But its all based on productivity studies as well as keystrokes per unit time.

So it's not the arbitrary "you" or "me" between customer and service provider. You can't "globalize" the "means of production" any more than these principles do. You can argue no end about supply and demand and other economic factors, but I tell you, SUPPLY IS FINITE.

24 hours a day. Not even a lawyer can charge 25. And a Martian can only add a few minutes.

[Edited at 2004-09-29 11:24]


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James Calder  Identity Verified
Spain
Local time: 11:14
Member (2006)
Spanish to English
+ ...
A largely sterile argument Sep 29, 2004

I've come to the conclusion that the whole argument about prices is pretty sterile. The market has opened up and there are more translators operating then ever before so it's natural that rates should fall. You only have to see how many translation agencies, services, consultancies (call them what you will) have opened up in the last 10 to 15 years to realise how much more competitive the market has become, hence the undercutting of one's competitors and sliding rates.
In some areas, falling prices is a fact of life. Arable farmers in the UK and have seen wheat prices fall from around 110GBP/ton 5 or 6 years ago to around 60GBP/ton now. Look at what's happened to shipbuilding and other heavy industries in Europe.
I'm not an advocate of letting the market rule but in these money-oriented times we are utterly powerless to prevent clients from picking and choosing where and with whom they do their business. A minimum rate for the translation industry is, I'm afraid, an unenforceable utopian ideal just as minimum prices in arable farming or shipbuilding would be.


[Edited at 2004-09-29 08:21]


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Steffen Pollex  Identity Verified
Local time: 11:14
English to German
+ ...
Same old song Sep 29, 2004

Kathinka Lavelle wrote:

Thanks for a push in the right direction!


Please, get used to living in a market economy and try to accept that the "social market economy" is a fiction - instead of trying to administer everything.

Why putting this issue on the table over and over again?

Is Proz responsible for YOUR rates? Hardly...

I fully agree with Henry here.





[Edited at 2004-09-29 08:31]


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RobinB  Identity Verified
Germany
Local time: 11:14
German to English
Bottom-up and top-down approaches Sep 29, 2004

Henry,

What you describe there is the bottom-up approach. It's well documented, as you say, and I spoke about it myself at an ITI conference back in the mid-1990s.

It's certainly a useful exercise, but I think it is more meaningful if it's combined with a top-down approach.

The starting point in the top-down approach is the "composite weighted rate per billing unit". This takes the rates the translator receives from customers per billing unit (1000 words, line, page, etc.) and weights them according to frequency (i.e. rate XX = 10%, rate YY = 35%, rate zz = 55%, and so on). The result is the composite weighted rate.

You then multiply this composite rate by the number of billing units you can realistically achieve in a year (calendar or fiscal), with a maximum capacity of 11 months per year (10.5 would probably be more realistic), to produce the theoretical gross revenue per year (excl. VAT/sales tax).

Then subtract tax-deductible operating expenses for the year, e.g. telecoms, office supplies, (proportionate) rent and utilities, travel, education and reference, depreciation and amortization (equipment, hardware and software), memberships, business insurances, any finance costs, etc. The realistic minimum here is 25%.

Then subtract any personal tax allowances for which you're eligible, to produce your taxable income. Then subtract tax(es) and any compulsory insurance contributions at the applicable rates to produce your net income for the year. Remember that you've also got to finance new capital expenditures (replacement hardware/software, etc.) from this net income, as well as build up your emergency reserves.

If the product of the top-down approach (prorated on a monthly basis) is lower than the starting-point of the bottom-up approach, you've got a problem.

You can also use this method on a per-customer basis, i.e. if a customer is offering you XX per billing unit, to work out how this translates into net disposable income.

Not rocket science anyway.

Robin


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RobinB  Identity Verified
Germany
Local time: 11:14
German to English
Market rules (part 2) Sep 29, 2004

Lefteris,

Without wishing to tread on too many toes: what exactly are you trying to achieve? I'm sure that many of us would like to earn more than we do at present, but you surely can't be waiting for some "authority", as you put it, to regulate prices, can you? What are you suggesting, some sort of state intervention?

"It used to be $0.14/word, or even more. Seven (7) years ago. What happened? What happened and now we have to wait 10 more years for the prices to go to $0.14 again?"

In many areas, it still is 0.14 per word, or much more. Please don't think that online bidding platforms are necessarily representative of the market as a whole - they reflect only part of the market.

"That’s how the price war started:"

I see no evidence whatsoever of a "price war". A price war necessarily involves organized efforts by vendors to win business away from their competitors. But to me, it looks like the buyers are more able to dictate prices than the vendors, i.e. it's probably a buyers' market.

"car companies are richer than ever"

You checked recent results at the automakers? Most of them are suffering, massively. And others only survive because of overt state aid or hidden subsidies. Best to compare like with like, I think.

"The translation community must be the only one in this solar system with 95% of its member losing money at a steady rate"

I presume that this is a highly subjective cry from the heart, rather than a factual statement. But if you really want to see a community where 95% of the members are losing money, check out the German retail market.

Translating is certainly more *difficult* today (for a number of reasons) than it was, say, 10 years ago, but that doesn't mean it can't be profitable. But if, as you claim, 95% of translators are losing money, then logic dictates that they'll pull out of the industry soon, thus creating a massive supply-side imbalance, and rates will soar again. OK?

Robin

[Edited at 2004-09-29 08:45]


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Henry Dotterer
Local time: 05:14
SITE FOUNDER
How about a Howto? Sep 29, 2004

RobinB wrote:

Henry,

What you describe there is the bottom-up approach. It's well documented, as you say, and I spoke about it myself at an ITI conference back in the mid-1990s.

It's certainly a useful exercise, but I think it is more meaningful if it's combined with a top-down approach.

Nice double-check. So would you like to do the Howto...?

Incidentally, both Robin's approach and mine are only for calculating *minimums* (which was the topic raised). Target rates are another matter, and Parrot's comments and citations from Mr. Hine are very important to bear in mind.


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