The end client = risk + more cents/word
Thread poster: Igor Radosavljevic

Igor Radosavljevic  Identity Verified
Serbia
Local time: 12:55
Member (2010)
English to Serbian
+ ...
Aug 27, 2010

Dear Proz community,

In searching for a better job opportunity I am bent on targeting end clients.

According to your opinion what is the percentage of the i.e. money/word from a total sum that an outsourcer company gets when securing a job for a translator.

Lets say, if a translator has been paid 0.07 EUR/word, how much would an outsourcer company get.

In other words, knowing the risks in dealing with end clients, does it pay off "hunting" them?

Thanks in advance,

igor


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Samuel Murray  Identity Verified
Netherlands
Local time: 12:55
Member (2006)
English to Afrikaans
+ ...
Wild guesses Aug 27, 2010

Igor Radosavljevic wrote:
According to your opinion what is the percentage of the i.e. money/word from a total sum that an outsourcer company gets when securing a job for a translator? Lets say, if a translator has been paid 0.07 EUR/word, how much would an outsourcer company get?


The agency's cut is anything from 50% to 200% or more. So if you get 7c per word, don't be surprised if the agency gets 14c on top of that. But this is just wild guessing -- different agencies have different margins. I do believe this topic has been discussed before on the forums (not sure how to search for it, though). Remember that the agency also offers more reliable accounting services, better availability for repeat jobs, and additional services such as editing and QA.


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Kevin Fulton  Identity Verified
United States
Local time: 06:55
German to English
Direct clients not necessarily risky Aug 27, 2010

As Samuel mentioned, part of the fee an agency charges is related to marketing, billing, QA, office overhead, etc. Depending on the services an agency provides to the client and the cost of the translator, the additional margin might range from +50% to well over 100% above what is paid to the translator.

I have a few direct clients, and while my fee to them is much higher than what I might get from an agency, my costs are much higher. Negotiating deadlines, holding the client's hand, responding to queries do not result in a direct financial expense for me; however, the time consumed by this must be compensated. If I work on a project, I need to hire a QA checker; on larger projects, I also need to hire translators, and sometimes even graphic artists. I pay my translators for every word they translate. As a consequence, my net, considering compensation for administrative matters and paying translators, checkers, etc. isn't much greater than what I might get from an agency.

The other issue with direct clients is that they are more easily lost than won. They expect you to be available for them. If you turn them down too often, they'll go elsewhere.


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Igor Radosavljevic  Identity Verified
Serbia
Local time: 12:55
Member (2010)
English to Serbian
+ ...
TOPIC STARTER
Is it a draw then? Aug 27, 2010

If I understood it correctly, then it boils down to the same

Less headache - less money
More headache - more money

Should I deal the "headache" part on the first place?

btw.
thanks to Samuel and Kevin


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Roy OConnor
Local time: 12:55
Member (2009)
German to English
It often depends.... Aug 27, 2010

....on the size of the target company. Large companies often have their own in-house "agency", i.e. a department dealing with translations. This department will often accept a lot of the QA and organisational tasks, but will need the discount usually offered to agencies.

Small to medium-sized companies are usually the better bet and are prepared to pay more reasonable prices, but you may need to accept certain agency tasks from time to time, such as farming out translations that you yourself cannot cover, e.g. a different language pair.

As the company grows you may have to accept more work or lose the customer. The relationship with a direct customer can mushroom and you have to be prepared for it. It is worth it though and you should earn 50-100% more than with agencies.

The snag? Direct customers are a rare breed these days. Due to globalisation and internal cost-cutting, many SMEs prefer to deal with agencies.


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Neil Coffey  Identity Verified
United Kingdom
Local time: 11:55
French to English
+ ...
Aside from rates Aug 27, 2010

Another potential advantage with working for direct clients (which in my case constitute most of my business) is that there's often an economy of scale over time from working for the same client because you get used to the type of the material that they ask you to translate. So aside from the raw rate per se, even if you were to charge a rate similar to that charged to agencies, there's a question of efficiency and return on investment.

Of course, through an agency, you may also get several things for the same end client, but I've generally found more project-to-project similarity with regular direct clients.


[Edited at 2010-08-27 14:13 GMT]


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Soonthon LUPKITARO(Ph.D.)  Identity Verified
Thailand
Local time: 17:55
Member (2004)
English to Thai
+ ...
My stability Aug 27, 2010

I am getting continuous jobs from one big local translation agency which have many branch offices from year 1978. I am happy to continue this relationship since 1) I need not discuss with clients by myself 2) Payment is punctual 3) The agency has staffs to edit and proofread my translation 4) Big work flow 5) Assurance of tax issues 6) I create a strong interdependency 7) I can adjust work load and delivery date rather freely 8) I have support on other languages. I do not find that the rate I earn is smaller than those of direct clients with general domains of documents.

Soonthon Lupkitaro


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Dragomir Kovacevic  Identity Verified
Italy
Local time: 12:55
Italian to Serbian
+ ...
it all depends (mož' da bidne, a ne mora da znači) Aug 27, 2010

Igor Radosavljevic wrote:

Dear Proz community,

In searching for a better job opportunity I am bent on targeting end clients.

According to your opinion what is the percentage of the i.e. money/word from a total sum that an outsourcer company gets when securing a job for a translator.

Lets say, if a translator has been paid 0.07 EUR/word, how much would an outsourcer company get.

In other words, knowing the risks in dealing with end clients, does it pay off "hunting" them?

Thanks in advance,

igor



A sole free-lancer when approaching an end-client, cannot apply all the possible markup of a real transl. agency***:
- mostly does not offer a complete service on long-term scale. Some single jobs, 100% suitable to a free-lancer, can make her/him play at the best of quality, with higher price hits.
- an end client does not expect a tariff from a sole free-lancer, as like from an agency.

Therefore, an average mark-up is lower, with an advantage for the end client. We so often forget how lower expenses can keep moving an economy much better. We all do love seeing product at a good price, but of excellent quality. This latter attribute, being at a good price and give excellent quality, conserves a relationship end-client : tr. free-lancer. I would not ever say that a 25% higher tariff for an end-client, would be improbable, on the contrary. Of course, there are various base tariffs given to an agency, supplements for format, urgency, language group, etc. These are to be kept with end-clients as well. But a 25% higher price for an end client, would make him stay with you.

As for whether the hunt for end-client is worth attempting it, of course it does. It is only that distant clients, or those abroad, are impossible to maintain or approach, it is unrealistic. It is like trying to maintain a relationship with a Court-house, 400 km away: impossible. But is feasible in an 30-60 km area.

I might add this:
in many other "industries" you can't ever hear: "I need an agency-level price", from an agency or from a individual outsourcer. You are asked to translate a single document, and you see the person once in 3 years, but with a request for an agency-level price.

In industry, there are no trader-prices, mostly. One has to deal big lots of merchandise in order to obtain quantity discounts. Also, there is a minimal quantity for an industrial end-user.

And in the end, is it possible to apply a system of quantity-tariffs for agency world? I would like seeing it possible; depends also on a language pair. How can we expect to have quantity for a minor language pair? If there were a quantity, then your pair with serbian would cost less.

a real transl. agency*** = a complete system service, not a paper-managing unit.

D

[Edited at 2010-08-27 15:09 GMT]

[Edited at 2010-08-27 15:11 GMT]


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Ricardo Horta  Identity Verified
Local time: 11:55
English to Portuguese
+ ...
My experience... Aug 27, 2010

I do some jobs for an end client (a corporation) who pays me through Paypal. When I finish a job, I send them the file and later that day I receive an e-mail from Paypal saying "You've got money!", sometimes only 30 minutes after I sent my e-mail with the translation.

On the other hand, some agencies can take up to 3 months to pay. So, it's not always a risk working with end clients.

Answering your question, I know at least one agency that pays translators around 37% of what the client pays them.

Ricardo


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Igor Radosavljevic  Identity Verified
Serbia
Local time: 12:55
Member (2010)
English to Serbian
+ ...
TOPIC STARTER
summarizig, summarizing.... Aug 27, 2010

Thnx Dragomir, Ricardo and all you guys.

I do not have any aspirations for becoming an outsourcer or a TA, yet, many people have a fruitful business affiliation with end clients, which has been confirmed in this very place.

I believe we all strive to work less for more (money matters - and time too), on all the other aspects, mediators seem to be of avail.

It would be quite nice if an outsurcer would pour out his heart for us


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Henry Hinds  Identity Verified
United States
Local time: 04:55
English to Spanish
+ ...
Worth It Aug 27, 2010

Virtually all my clients are direct and local, or if from elsewhere they have been picked up through local contacts. While that is an atypical situation in Proz.com and probably not your situation either, I have no headaches at all. In fact I am always able to provide the services my clients need on a timely basis, and they in turn are very sensitive to my situation because they know I work alone and at times I travel or take a vacation, but maintain contact. They are flexible when my availability might be limited, and I am flexible because I can take on jobs just about anywhere and any time and get them done quickly and efficiently.

My clients also pay reliably, and in all ways they are a joy to work with. Many of them I know personally.


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Tomás Cano Binder, BA, CT  Identity Verified
Spain
Local time: 12:55
Member (2005)
English to Spanish
+ ...
The natural evolution of the translator Aug 27, 2010

I reckon that the desire to have direct customers is a natural inclination in the freelance translator. We all have been/will be there, I guess.

In my opinion, the best customer a freelance translator can have is a good agency. By "good agency" I mean an agency that A) respects you as a person and values your work, also in the monetary sense; B) pays you on time, C) has plenty of end customers so you are kept busy and do varied work.

An agency can give you a continuous flow of work and can manage all the administration and project management required for a whole host of customers. We don't have the time for that. For us, it is a lot better to issue a handful of invoices at the end of the month and managing a dozen agency customers, instead of having to deal with hundreds of customers each sending a single job each month, each with different requirements and expectations.

Good agencies also have a selling side, and they are often local to interesting, larger companies who would not even care to open the envelope of your CV: you are not interesting to them because you cannot offer a global solution. Good agencies also have technical resources and DTP people who take care of the trickier aspects of formatting, so your work is overall easier than with an end customer, who demands a turnkey service.

Yes, indeed dealing with end customers can be more interesting because you get to learn more about their business, endeavours, market, and aspirations, but good agency customers are probably a more stable business option for the freelance translator.


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Anja Weggel  Identity Verified
Local time: 12:55
Member (2007)
English to German
my 2 cents Aug 27, 2010

Hi everyone,

Aside from practical considerations, you should not forget the less measurable and very personal questions. How much of a headache / stress is it for YOU to deal with a client directly? Do you enjoy negotiating? Do you enjoy dealing with direct customers? Do you enjoy dealing with people who may not know a thing about translating or languages?
I know, I could not do it. All my clients are agencies, I am simply not good at hunting direct clients or working with people who do not know my profession. I find it very convenient to have my handful of agencies who give me plenty of work.
On the other hand, there are people enjoying the dealing with direct clients. So aside from the question, is it worth moneywise, it may be a good idea to ask yourself if it is something you enjoy.

Best regards
Anja


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Henry Hinds  Identity Verified
United States
Local time: 04:55
English to Spanish
+ ...
Good Agency Aug 27, 2010

In response to Tomás, I must say that my translating career began with a good agency. By that I mean not just an agency, but a person I knew very well and trusted implicitly, and who was always extremely considerate and helpful to me to the point that I considered her to be"my angel". In my evolution that agency came first, allowed me to develop as a professional, and was the key to my sucess. Later the agency came on hard times, but I had evolved to a point that I could get work from other sources. Not so long after I was able to quit my "day job" and devote myself to translation because I had developed a reputation locally and direct clients would seek my services.

So now my clients are virtually all direct, and like I say, they are a joy to work with and they enjoy having me work for them.


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