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How to deal with the falling USD?
Thread poster: Thomas Johansson

Thomas Johansson  Identity Verified
Peru
Local time: 04:59
Member (2005)
English to Swedish
+ ...
Feb 6, 2008

Basically, I am trying to figure out whether I should raise my rates for my US clients in response to the falling USD. (I translate from English to Swedish.)

For instance, I have this US agency client that I like working for. I have always given them a low rate, and my impression is that it is part of their business idea to provide low rates for their own clients. My rate for this agency over the last year has been USD 0.09 per word. As it is, however, I am also trying to maintain a minimum rate of 0.08 EURO per word (which I only use for good clients that I have been working with for a long time; other clients get a higher rate). Now, I have just discovered that today 0.08 euro equals approx. USD 0.11, which means that ideally I should raise my rate for this client from USD 0.09 to USD 0.11 per word, and I am not sure how to go about this. I don't want to lose this client as I enjoy working with them, and I always try to maintain a collaborative attitude with my clients (i.e. in the sense that solutions must be comfortable and work for all parties involved: me, the agency, and their clients).

Would USD 0.11 per word (i.e. for the translator) fit with this client's company profile as an agency providing low-cost translations in the US?

What is the general situation in the US right now: are translation rates (for e.g. European languages) increasing due to the falling dollar?

Any opinions or reflections appreciated.

Thomas


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Nicole Schnell  Identity Verified
United States
Local time: 02:59
English to German
+ ...
Low cost? The United States? Why? Feb 6, 2008

I can't believe that you are working for such rates. The PMs must be rolling on the floor with glee. I assume the agencies are sending food as well?

This approach ("Awww, the dollar is weak. They must be starving...") is exactly what is ruining prices on the market.

Edit: Addendum

I didn't answer your question, sorry.
The prices are going up, of course. Translators for European languages usually also have European clients and charge European prices. Why would they charge their US clients less?

[Edited at 2008-02-06 04:08]


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bohy  Identity Verified
France
Local time: 11:59
English to French
+ ...
Rates not increasing... but not that low Feb 6, 2008

Due to the current euro/dollar exchange rates, many European translators are forgetting about their US clients. Which very likely means that translation agencies have to look for translators inside the U.S., and life is not cheap here, so translators are not.
Of course, rates depend highly of your specialization, but even $0.11 is cheap, in my opinion.
I do not know what is an agency providing "low-cost translations". I have the impression that all of them tell their translators, now and then, that they have to offer low-cost translations to keep their customers... and of course ask you to lower your rates. As it is always the same discourse, don't listen too much. Personnally, when I rose my rates, none of my clients left. But of course, you will never know if it works also for you before you try.


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Yongmei Liu  Identity Verified
United States
Local time: 02:59
English to Chinese
+ ...
You are free to raise your rates Feb 6, 2008

But I don't think the devaluation of USD against EURO is a good reason for doing it in and of itself. There is no abnormal inflation in the U.S., so why would US agencies raise their rates - unless they have to rely on European translators to keep their business going? There are so many variables to be considered - are your rates already low, do you work in a specialized field, and, for your language pair, are translators hard to find in the US, etc, etc. My point is, US curreny depreciation is a macroeconomic event and there is little individual translators can do about it.

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Margreet Logmans  Identity Verified
Netherlands
Local time: 11:59
English to Dutch
+ ...
Step by step Feb 6, 2008

Try raising your rates to 10 cents first, take it one step at a time.
New clients: charge 11 cents right away.

By the way, according to the currency converter I use, 8 cents in EUR is closer to 12 cents USD.

Whether or not this fits the clients profile as a low cost company - well, that's not really your problem, is it?


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Oleg Rudavin  Identity Verified
Ukraine
Local time: 12:59
Member (2003)
English to Ukrainian
+ ...
Behaviour of translation rates Feb 6, 2008

Thomas Johansson wrote:are translation rates (for e.g. European languages) increasing due to the falling dollar?

Translation rates will not go up or down on their own; it's the translators themselves who raise or lower them. So the question should be as follows: are translators (for e.g. European languages) increasing their rates due to the falling dollar? (The answer is "Yes, pretty often").
The next logical question is, should I increase my rates? Due to the falling dollar, or because I feel I'm undercharging, or for any other reason? And how will it affect my business? Will I lose the client I like working for, or will I lose a client I really can't afford losing?

It's up to each of us to react to the ever changing situation.

Cheers,
Oleg


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Jenny Forbes  Identity Verified
Local time: 10:59
Member (2006)
French to English
+ ...
Exchange rates generally Feb 6, 2008

Oleg Rudavin wrote:

Thomas Johansson wrote:are translation rates (for e.g. European languages) increasing due to the falling dollar?

Translation rates will not go up or down on their own; it's the translators themselves who raise or lower them. So the question should be as follows: are translators (for e.g. European languages) increasing their rates due to the falling dollar? (The answer is "Yes, pretty often").
The next logical question is, should I increase my rates? Due to the falling dollar, or because I feel I'm undercharging, or for any other reason? And how will it affect my business? Will I lose the client I like working for, or will I lose a client I really can't afford losing?

It's up to each of us to react to the ever changing situation.

Cheers,
Oleg


Although the dollar/euro/Sterling rate shows a "weak" dollar at the moment, exchange rates change every day (indeed, many times a day). You may well want to raise your translation rate for all sorts of reasons, but remember that the exchange rate on the day you send your invoice will not be the same as the exchange rate on the day your client pays you, maybe 30 or more days later - it might be better, it might be worse.
Working for a foreign company is therefore always something of a lottery, but I find that on the whole you win sometimes and lose other times.
Best wishes,
Jenny.
P.S. I agree with Margreet - try a gradual increase and see what happens.


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xxxmediamatrix
Local time: 05:59
Spanish to English
+ ...
What goes down ... Feb 6, 2008

... must come up. It will probably take several months, it may take years. But it could happen next week or even tomorrow.

While you are thinking up some convincing arguments to explain to your clients why the weak dollar obliges you to raise your rates, I suggest you would be well-advised to work out some equally convincing reasons why you will be happy to reduce your rates by an equivalent amount once the exchange-rate round-about comes around and the Euro starts to fall.

It's easy enough to convince a client to pay more (and if it doesn't work, at worst you lose the client). But it can be far more difficult to convince yourself to lower your rates (which are already low, at least for Europe) - and if you can't convince yourself what do you do? Sack yourself? Harikiri?

By your own admission you are working at the low end of the rates scale. One of the risks associated with low rates/price cutting is that you are less able to ride out exchange-rate storms and other short-term market upheavals. You're like a small dinghy getting tossed around on the ocean, with your meagre profit margin slopping overboard with each wave, while those charging higher rates can be more pragmatic about these things and can cruise steadily through the storm like a big passenger liner.

Suggestion: why not take advantage of the opportunity presented by the current weakness of the dollar to invest in a bigger boat?

MediaMatrix


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Jose Ruivo  Identity Verified
Portugal
Local time: 10:59
Member (2007)
English to Portuguese
+ ...
Too much free time, or too much work? Feb 6, 2008

Thomas, I think that you should always look for better paying clients.

However, what is your present situation: are you 1) too busy with work, more than you'd like, or 2) are you bored with too much free time on your hands?

If 1), defintelly start increasing your rates (perhaps 1 cent at a time); if 2), impose on yourself looking for new clients, and try the best deal you can get.

Not all language combinations are: 1) equally paid, and 2) equally demanded. That also help to should explain why some of us are better paid than others.

Good luck


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Henry Hinds  Identity Verified
United States
Local time: 03:59
English to Spanish
+ ...
No problem Feb 6, 2008

If you are living in Mexico, the currency is highly dependent on the US dollar, so therefore you would not be losing as opposed to other countries where the US dollar has fallen against local currencies.

You can always try to charge more, but that also depends on how your clientele accepts that.


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ViktoriaG  Identity Verified
Canada
Local time: 05:59
English to French
+ ...
Five words Feb 6, 2008

Charge. In. Your. Local. Currency.

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nruddy  Identity Verified
Mexico
Local time: 04:59
German to English
I understand where you're coming from Feb 7, 2008

Since Thomas is living in Mexico, he's not going to charge foreign clients in pesos (the local currency). The problem is that as a European living in Mexico, you are always watching the euro/dollar (or euro/peso) exchange rate because you make trips home and spend lots of money in Europe on those trips, not to mind stocking up on resources there. Also, if most of your clients pay in euros and one of your clients pays in dollars, it means you are suddenly earning a lot less with that client and working for him becomes a lot less attractive for you.

If you have a good relationship with your client, you could try explaining the situation and see whether you can reach a compromise. A lot will depend on your client's situation: if his clients are mostly in Europe, he may be in a position to pay you more.


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bohy  Identity Verified
France
Local time: 11:59
English to French
+ ...
You said "react"... Feb 7, 2008

Oleg Rudavin wrote:

It's up to each of us to react to the ever changing situation.



Today, I turned down a translation agency offering a rate of $0.10 for software strings translation, and of course a huge amount with veryshort deadline... and without showing the files, of course. I tried to make as clear as possible why it was not acceptable.

In my opinion, it is how we can help each other.


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Samuel Murray  Identity Verified
Netherlands
Local time: 11:59
Member (2006)
English to Afrikaans
+ ...
One solution Feb 7, 2008

Thomas Johansson wrote:
Now, I have just discovered that today 0.08 euro equals approx. USD 0.11, which means that ideally I should raise my rate for this client from USD 0.09 to USD 0.11 per word, and I am not sure how to go about this.


Would you be willing to give existing US clients a 30% discount on all your work? Because by charging them USD 0.08 instead of USD 0.11, that is effectively what you're doing. Why not have separate EUR and USD rates for new clients, and retain your old dollar rate for existing clients?

You could also think of it the other way around... would you, as a client, have been happy with a sudden 30% hike in rates by your suppliers?

Personally, I charge separate USD and EUR rates. I also have a GBP rate on my site, but recently I discovered that the British lira has been weakening against the Euro over the past year or two, so that rate is also outdated.


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Samuel Murray  Identity Verified
Netherlands
Local time: 11:59
Member (2006)
English to Afrikaans
+ ...
Disadvantages of that... Feb 7, 2008

Viktoria Gimbe wrote:
Charge. In. Your. Local. Currency.


The only advantage of doing that is that makes it easier for you, but for most of your clients, you're actually making life more difficult, because now they can't trust yet another aspect of your service -- the price. This may be fine for sluggish currencies that weaken or strengthen slowly over a relatively long period of time, but it won't work for the more dynamic currencies, of which the exchange rate increases and decreases rapidly and drastically over short periods of time (days and weeks instead of months and years).


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