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how much commission to charge?
Thread poster: Virginia Navascues

Virginia Navascues  Identity Verified
Local time: 00:40
Member (2008)
Spanish to English
+ ...
Nov 3, 2011

I work in Spain as a freelance translator. Lately, I have been having so much work that I am considering sending some to a colleague. Can anyone tell me how much commission to charge this person? I want it to be a fair amount for both of us.

I also assume the colleague must be an autonomous worker, to be able to invoice me for her portion of the job.

Any advice is welcome.


 

XXXphxxx (X)  Identity Verified
United Kingdom
Local time: 23:40
Portuguese to English
+ ...
Don't forget your proof-reading Nov 3, 2011

Since your neck is on the line and you are the one who has the relationship with your client I assume that you will proofread your colleague's work rather than submitting it 'blind'. Therefore I would assume that you add to your commission the time spent doing this.

 

Virginia Navascues  Identity Verified
Local time: 00:40
Member (2008)
Spanish to English
+ ...
TOPIC STARTER
commission Nov 3, 2011

Yes, of course, I realize that. I'd have to keep tabs on this person's work until I could really be sure I can trust her work (and even then, because it took me quite a few years to rustle up my clients). In that sense, I might have to charge a flat commission plus the time it takes me to review (I charge reviews by the hour instead of by the word).

But...the million dollar question is what commission is fair? I don't want to act like these agencies that want you to work for peanuts, but neither do I want to do myself out of the money we all need so much.


 

Kevin Fulton  Identity Verified
United States
Local time: 18:40
German to English
Forget charging a commission Nov 3, 2011

There are other ways of handling outsourcing that won't offend a colleague. You don't need to reveal how much you're being paid. You have to handle administrative issues with the client as well as do the checking of the colleague's translation. Each of these involves some effort on your part and should be charged against the amount your colleague should be paid.
Let's assume that you're being paid .15 cents/word. Administrative costs (time dealing with the end client) might be as much as 10 percent of the total charge for the job, thus 1.5 cents/word -- let's round this up to 2 cents/word. Checking the translation might eat up 20 percent of the what you might make, or 3 cents/word. Therefore you should pay the colleague 10 cents/word.

On those rare occasions when I outsource work, I'm upfront with my colleagues and tell them that I'm making more per word than I'm paying and explain why -- I don't reveal what the client is paying me. I've never had a complaint. In that way, the word price you're offering is the genuine final word price, and there's no mention of deductions for commissions.


 

Henry Hinds  Identity Verified
United States
Local time: 16:40
English to Spanish
+ ...
Give it to them Nov 4, 2011

If you do not have the time, then just give the job to your colleague, forget about trying to make money off it, let the colleague handle it with the client at the price they agree. That way your worries are over. If you have plenty of work, then why try to squeeze a client or a colleague for more?

 

Andy Watkinson
Spain
Local time: 00:40
Member
Catalan to English
+ ...
Hi Nov 4, 2011

Henry Hinds wrote:

If you do not have the time, then just give the job to your colleague, forget about trying to make money off it, let the colleague handle it with the client at the price they agree. That way your worries are over. If you have plenty of work, then why try to squeeze a client or a colleague for more?


Henry, unsurprisingly, is 100% correct.

Might I add that, by following his advice, you will:

a) Demonstrate to the client that you're professional and care about not "leaving them in the lurch" because you're already working at full capacity.
(the client should know why you're referring them to another colleague and that subsequently it's "business as usual").

b) Will generate goodwill which, in my limited experience (32 years), pays dividends.

Saludos,
Andy.


 

Tomás Cano Binder, BA, CT  Identity Verified
Spain
Local time: 00:40
Member (2005)
English to Spanish
+ ...
Agree with Henry Nov 4, 2011

Introduce the customer to this other person and let him/her handle the matter directly. If the customer is happy with your work, they will always ask you first.

 

Siegfried Armbruster  Identity Verified
Germany
Local time: 00:40
Member (2004)
English to German
+ ...
+1 to Henry Nov 4, 2011

Henry Hinds wrote:

If you do not have the time, then just give the job to your colleague, forget about trying to make money off it, let the colleague handle it with the client at the price they agree. That way your worries are over. If you have plenty of work, then why try to squeeze a client or a colleague for more?


Henry is absolutely right. You either turn into a real agency, which means you might have to raise your rates and take the responsibility for the job or into a "box shifting" agency (something nobody needs) or you just do what Henry recommended (which in my opinion is the way freelancers should collaborate in such a situation).


 

XXXphxxx (X)  Identity Verified
United Kingdom
Local time: 23:40
Portuguese to English
+ ...
Only if you know the quality of your 'colleague's' work Nov 4, 2011

I agree with all of the above suggestions but this assumes that you are familiar with this colleague's work and think it is of a sufficiently high quality to be recommended. If not, your client won't be thanking you for the referral and you could end up jeopardising your relationship with them.

 

Attila Piróth  Identity Verified
France
Local time: 00:40
Member
English to Hungarian
+ ...
+1 to Henry Nov 4, 2011

I also think that you should follow Henry's advice unless you add genuine value to the process. In the 15-cent example, the administrative part may add no value.

Recommend a top-tier colleague, who you are sure will deliver high quality, and who charges accordingly. Choosing someone who charges a slightly higher price than you do gives you a peace of mind: you don't have to worry that the client will discard you because someone delivers just as good work as you do at a lower price.

Your colleague will certainly appreciate this, and what goes around, comes around. And your client will also appreciate it, and will consider you as a self-confident professional, who has already built strong peer relationships.

Best,
Attila


 

Emma Goldsmith  Identity Verified
Spain
Local time: 00:40
Member (2010)
Spanish to English
tax office Nov 4, 2011

Another thing to consider is how you're going to work this out with the Tax Office. You'll need to declare and pay the 15% IRPF retention that your colleague applies to her bill and all this will involve more paperwork.

 

Michael Wetzel  Identity Verified
Germany
Local time: 00:40
German to English
commission vs. subcontracting Nov 4, 2011

Hello,
I think that Henry's answer is a good answer (especially considering Emma's point about tax complexities). I have an active relationship with one translator on this basis and several similar contacts that have never led to jobs for anyone.

If you want to subcontract, then a share of 35%-50% had always seemed to me to be the standard (based primarily on discussions of the German market). However, Tomás recently estimated that 50-70% may be normal for Spain (please correct me if I am distorting what you said). The percentage for jobs passed on by colleagues (as opposed to agencies) seems to be significantly less: you'd have to gather experience and then do the math to see what works.
In this scenario, you would take care of everything, resolve all queries, edit everything, write the invoice, carry the entire risk of the end client paying late or not paying, etc. This may be a good way to increase your profits if you consistently have more work than you can handle. It can also backfire in countless ways for all parties involved.

For me, the use of the word "commission" in your question suggested a different scenario: You would pass the job on to a colleague for a percentage of his or her fees, but have no other connection to the transaction. Here, your work in customer acquisition would add significant value for your colleague; you would be paid for this and then have no further involvement. The colleague would invoice and also otherwise deal directly with the client.
I have never(!) heard of any translators doing this, but it seems like an interesting model to me. While this is essentially what bad agencies do, there is an important diffference: By reducing your role and risk, you could make a good profit in spite of a much smaller cut. Theoretically, this could lead to a win-win situation for you and your colleague.
In terms of taxes, however, this is likely to lead to even more complications (at least it would in Germany).

Sincerely
Michael


 

Virginia Navascues  Identity Verified
Local time: 00:40
Member (2008)
Spanish to English
+ ...
TOPIC STARTER
commission or fee (whatever) Nov 4, 2011

Hi everyone:

Many thanks for your time and trouble to answer my query.

However, I don't agree with what seems to be the majority opinion of just giving away the job. It took me quite a few years and lots of effort to achieve the clientele I presently serve, most of it came by word of mouth. I am not about to hand it over to another person.

My idea was to give my colleague the job, but I would review the work and bill the client directly. She would bill me for her part, some of which would be deducted from my taxes as expenditures, and I would still be responsible to my client.

This situation could eventually turn into a kind of agency, who knows? Or it might be a once-only job. I am not usually swamped with so much work that I cannot handle it, this is probably an exception. And if it is not, all the better for whoever I team up with.

Also, though I work many, many hours a day, I certainly don't earn all that much money (especially here in Spain, where the public administrations can easily take up to 4 months or more to pay), and I have not dared to raise my prices during the last two years for fear of losing clients, despite the continuous rise in the price of living. So, the comment about "squeezing money" out of people seems unwarranted to me.

I'm still not sure what I will eventually do. Maybe just work more hours and do it myself.


 

Jeanie Eldon  Identity Verified
United Kingdom
German to English
+ ...
confidentiality agreement Nov 4, 2011

Dear Virginia, don’t forget about the confidentiality agreement! if you initially signed one of these when you started working for the client you would be in breach of this if you outsource the work to a colleague without advising the client.

 

Attila Piróth  Identity Verified
France
Local time: 00:40
Member
English to Hungarian
+ ...
Subcontracting Nov 4, 2011

Hi Virginia,

If you are concerned that you would lose this client to your colleague, then the best way to go about is either to do it yourself, or to ask for quotes from colleagues whose quality you would trust. Let them quote, and then decide whether it makes business sense for you to work with them. Note, however, that you should not do this if you signed a service agreement stipulating that you should not subcontract work.

The paperwork that you will have to do should not be underestimated. Neither the stress that is an inherent component of outsourcing: whether the translation will arrive in time and whether it will be of adequate quality. By being part of the process, you put your good relationship with the client on the line, so you must leave yourself sufficient time for revision even if the translation comes in late and needs considerable editing. Choosing the right colleague is essential.

If you end up spending more time with administration and revision than you initially thought, put it down to experience - after all you are dipping your toe into the new waters of subcontracting. You may also need to check a couple of things with your tax authorities so that you have a clear picture, which is, once again, time.

This first experience will help you devise your long-term strategy for handling similar situations. One obvious possibility is to work as an agency, in which case you should make sure you add adequate value (by preparing the project, proofing it, handling terminology, dtp, etc.) that would justify your presence in the production chain. There are lots of important points in this article by José-Henrique Lamensdorf.

The other possibility is to establish very strong peer relationships with colleagues who you can trust. In-person meetings of translator associations of conferences can help translators build such relationships. If you have such a colleague, you can recommend your clients to contact him/her in your absence - and they can do the same. Clients usually appreciate this, and understand that nobody can be available around the year. You provide them an extra service that few of your competitors do.

Best,
Attila


 
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