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Intriguing terms in supplier's contract
Thread poster: Simon Chiassai

Simon Chiassai  Identity Verified
Spain
Local time: 17:56
English to French
+ ...
Oct 12, 2013

Hello everyone,

I have recently entered talks with an agency to join their database. They sent me the usual pain-in-the-neck agreement to sign, but while reading it, I stumbled upon this (name of the company removed):

At the end of the year, the Supplier shall grant [the company] a discount based on the total annual turnover from projects completed. It is at the discretion of [the company] whether this credit be received in the form of a payment or offset against further orders placed with the Supplier.

From 20,000 Euro net 1.5 % discount
From 35,000 Euro net 2% discount
From 50,000 Euro net 3 % discount

The amount of discount to be conceded shall be established according to the total turnover volumes listed above. This figure shall be assessed annually.


I have never seen anything like this before, and I would like to know what is your take on this? My inital reaction was to say "well, then I'm not going to be working for more than 20,000 for these people anyways". But nevertheless, these conditions make me feel uneasy.


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xxxnrichy
France
Local time: 17:56
French to Dutch
+ ...
Marges arrière Oct 12, 2013

Please have a look here:
http://fr.wikipedia.org/wiki/Marge_arrière

I have always been told that this was forbidden by law, because it is a really big present to your customer, which is not reflected in your invoices. (much bigger than a box of chocolates at Christmas). But I am not a lawyer.


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JL01  Identity Verified
United States
Local time: 11:56
English to French
+ ...
common in other industries Oct 12, 2013

Stuff like that is common in other industries, especially wholesale/retail.

Since most agencies seem to be managed by MBAs who (and it is tempted to use "which" here) have no idea of the business, and who anyway count words just like they would treat mass-manufactured items, it is not surprising that they apply the same tactics.

So, my vote is for a contract written by someone with zero experience in the translation business. Like you, I have to see one customer giving me over Euros 20,000 in business in a calendar year!


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Artem Vakhitov  Identity Verified
Estonia
Member (2012)
English to Russian
+ ...
I know one Russian company that is said to have such terms Oct 12, 2013

I heard that one Russian company I used to work for has such terms in their contract these days. But I wouldn't work like that.

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Mikhail Kropotov  Identity Verified
Russian Federation
Local time: 18:56
Member (2005)
English to Russian
+ ...
Brilliant! Oct 12, 2013

JL01 wrote:
MBAs who (and it is tempted to use "which" here)


You made my day with that quip!


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Recep Kurt  Identity Verified
Turkey
Local time: 18:56
Member (2011)
English to Turkish
+ ...
How about this. Oct 12, 2013

If a company accepts my rates and is providing me with €20,000 in jobs in the course of the year, I don't think "paying back" $300 is such a big deal. I would consider that a tip.

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Mikhail Kropotov  Identity Verified
Russian Federation
Local time: 18:56
Member (2005)
English to Russian
+ ...
But why shouldn't it work in the reverse direction? Oct 12, 2013

Recep Kurt wrote:
If a company accepts my rates and is providing me with €20,000 in jobs in the course of the year, I don't think "paying back" $300 is such a big deal. I would consider that a tip.


If I do $20,000 worth of work for a company, they probably turn a profit of around the same amount. By the same rationale, why shouldn't they tip me with $300 instead?


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Tim Friese  Identity Verified
United States
Local time: 10:56
Member (2013)
Arabic to English
+ ...
Good one Oct 12, 2013

Mikhail Kropotov wrote:

JL01 wrote:
MBAs who (and it is tempted to use "which" here)


You made my day with that quip!


Me too!


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Gerard de Noord  Identity Verified
France
Local time: 17:56
Member (2003)
German to Dutch
+ ...
Sign! Oct 12, 2013

I'd say agree. And stop accepting further orders whenever you feel like it.

Cheers,
Gerard


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Tim Friese  Identity Verified
United States
Local time: 10:56
Member (2013)
Arabic to English
+ ...
I agree Oct 12, 2013

Gerard de Noord wrote:

I'd say agree. And stop accepting further orders whenever you feel like it.

Cheers,
Gerard


I agree.

Also, I would like to state publicly: if any agencies have 20,000 euros of work for me at my standard rate minus a 1.5% discount, please contact me!


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Orrin Cummins  Identity Verified
Japan
Local time: 00:56
Japanese to English
+ ...
Could it be the same contract used for other agencies? Oct 12, 2013

That seems like a large sum for an individual translator, but what about other agencies? Agencies take work from other agencies all the time; it is not all that hard to believe that an agency (with multiple translators) could break those yearly marks.

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Phil Hand  Identity Verified
China
Local time: 23:56
Chinese to English
Some would be happy with it, others not Oct 13, 2013

Personally, I would object to this clause. But there are others in the thread who say they'd be OK with it. So rather than label it "right" or "wrong", let's just say it's one possible clause, and those who like it can accept it, those who dislike it can argue it. As written here it's very unlikely to ever be used, so not worth getting too excited about either way.
I've had more than 20k euros from a direct client once or twice, and I wouldn't have enjoyed applying the discount. But that was mostly interpreting; for translating perhaps it would feel more comfortable.


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Enrico C - ECLC  Identity Verified
Taiwan
Local time: 23:56
Member (2011)
English to Italian
+ ...
It's reasonable Oct 13, 2013

Simon Chiassai wrote:

Hello everyone,

I have recently entered talks with an agency to join their database. They sent me the usual pain-in-the-neck agreement to sign, but while reading it, I stumbled upon this (name of the company removed):

At the end of the year, the Supplier shall grant [the company] a discount based on the total annual turnover from projects completed. It is at the discretion of [the company] whether this credit be received in the form of a payment or offset against further orders placed with the Supplier.

From 20,000 Euro net 1.5 % discount
From 35,000 Euro net 2% discount
From 50,000 Euro net 3 % discount

The amount of discount to be conceded shall be established according to the total turnover volumes listed above. This figure shall be assessed annually.


I have never seen anything like this before, and I would like to know what is your take on this? My inital reaction was to say "well, then I'm not going to be working for more than 20,000 for these people anyways". But nevertheless, these conditions make me feel uneasy.



It's common business practice, in any field, to grant discounts based on volumes. I do grant discounts based on volumes and there are reasons for that:

- A small discount on volumes reduces customer churning
- Big volumes grant me a constant flow. A small discount keeps me going with huge volumes of work, so i focus on work, rather than hunting for customers.
- The customer you lose because you refused a small discount will force you to look for customers by yourself. Calculate those man-hours wasted in hunting for customers and you'll realize the loss is higher than the discount. Of course, you can be lucky and find a good customer who floods you with good work at your rate...but sooner or later they will find out an agency is offering services that are quicker and cheaper (Because it's happening everywhere and some of my then high income colleagues working for top brands for example are now working for the same brand but within an agency at much lower rates. They were direct customers....competitors simply swept them away in a blow).
- Expecting FULL RATES no matter what even if you get 100k words from a customer is simply unrealistic. They allocate a huge job to you and they expect you to work for less. If i were an agency i'd do the same, honestly.
- Would you rather work for 20k year without discount or for 50k a year with a 3% discount.
- Furthermore, that discount could be compensated by, say, a small increase in your rate. That would make it less bothersome. But if one single customer sends me so much work that i don't have to waste time hunting for more i'll take that. There are ways to compensate for the small loss.

I'd sign that NDA in one second as the conditions appear very reasonable, in my world. Someone else may have a different take on it.

[Edited at 2013-10-13 04:17 GMT]


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Triston Goodwin  Identity Verified
United States
Local time: 09:56
Spanish to English
+ ...
I wouldn't sign it... Oct 13, 2013

They're already making money off of your translations, why demand a rebate/discount on top of it? Especially if they expect me to send them money.

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Nicole Schnell  Identity Verified
United States
Local time: 08:56
English to German
+ ...
A tip? Oct 13, 2013

Recep Kurt wrote:

If a company accepts my rates and is providing me with €20,000 in jobs in the course of the year, I don't think "paying back" $300 is such a big deal. I would consider that a tip.



Usually the service provider receives a tip. That would be you. Imagine a scenario in a restaurant where the waiter has to tip the guest.

All they want is a volume discount in disguise.


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