subcontracting, how much of a cut to take
Thread poster: xxxtilos

xxxtilos
Jul 23, 2012

How much of a % cut is it customary to take from a subcontractor on a translation job that my business procured in whole due to my own experience and contacts?

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Henry Hinds  Identity Verified
United States
Local time: 04:20
English to Spanish
+ ...
Negotiate Jul 24, 2012

There are no rules. You just negotiate it with the other party.

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Nicole Schnell  Identity Verified
United States
Local time: 03:20
English to German
+ ...
"Taking a cut" is not the right approach. Jul 24, 2012

Outsourcing has nothing to do with pimping or the Mafia.

You have to calculate the time you will need to handle all of the efforts taken in-house - preparing files, the time needed for communication, editing, QA, administration and bookkeeping, file backup, etc.

That's the time that you will be paid for, while keeping in mind a buffer zone for emergencies. How to calculate such expenses depends on your experience and your personal management skills.

"Taking a cut" is not a management skill. That's sweat shop mentality.


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Rossana Triaca  Identity Verified
Uruguay
Local time: 07:20
Member (2002)
English to Spanish
Added Value, Responsibility & Risks Jul 24, 2012

As Nicole says, it basically depends on what you're bringing to the table.

1) What products or services are you providing on top of those performed by the subcontractor? (management, accounting, processing, QA, DTP, you name it).

2) Who will be responsible for the final product? (consider the resources necessary to correct any type of errors, or perform any changes or additions).

3) Who will take the financial risks? (both for non-payment issues and non-compliance penalties).

Charging a finder's fee to a colleague for providing a referral and nothing else is... well.. let's go with "dubious".


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Nicole Schnell  Identity Verified
United States
Local time: 03:20
English to German
+ ...
Rossana is right. You can charge for your services. Jul 24, 2012

Rossana Triaca wrote:

As Nicole says, it basically depends on what you're bringing to the table.

1) What products or services are you providing on top of those performed by the subcontractor? (management, accounting, processing, QA, DTP, you name it).

2) Who will be responsible for the final product? (consider the resources necessary to correct any type of errors, or perform any changes or additions).

3) Who will take the financial risks? (both for non-payment issues and non-compliance penalties).

Charging a finder's fee to a colleague for providing a referral and nothing else is... well.. let's go with "dubious".



Mere job-forwarding and taking a "cut" is disgraceful. Many translators who take on jobs from agencies or fellow translators do not realize the amount of work that is involved in finalizing translation projects before the product can be delivered to the end client.

Your idea of "taking your cut", simply because you set up a contact (could you have done the job by yourself? No?) is disturbing. Sorry, it is. You will not be successful in the long run.


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Phil Hand  Identity Verified
China
Local time: 18:20
Chinese to English
Contacts are valuable Jul 24, 2012

Nicole Schnell wrote:

Your idea of "taking your cut", simply because you set up a contact (could you have done the job by yourself? No?) is disturbing. Sorry, it is. You will not be successful in the long run.


I basically agree with Nicole and Rossana. If I am just matchmaking between client and translator, I don't charge for it. Earn the goodwill - it's worth far more than any money you'd make from it.

If you're providing proofreading any delivery to the client, then you can take a reasonable fee for that.

However, I do disagree with Nicole on one point: contacts are valuable, worth money, and a valid form of business. If you've spent time and money cultivating a wide client base, and now you want to benefit from those assets, you can do it. That makes you an agency, and you should start thinking like an agency. What services are you offering to translators (marketing, client management, project management) and what services are you offering to clients?

But if you're not ready to make the transition to being a professional outsourcer, then I would recommend just sticking to what you know. Take fees commensurate with the services you provide, and don't think of a job passed to another translator as a job lost. Think of it as a relationship built.


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Nicole Schnell  Identity Verified
United States
Local time: 03:20
English to German
+ ...
Of course, Phil. There are fine lines in terms of doing business, though. Jul 24, 2012

Phil Hand wrote:
I basically agree with Nicole and Rossana. If I am just matchmaking between client and translator, I don't charge for it. Earn the goodwill - it's worth far more than any money you'd make from it.

If you're providing proofreading any delivery to the client, then you can take a reasonable fee for that.

However, I do disagree with Nicole on one point: contacts are valuable, worth money, and a valid form of business. If you've spent time and money cultivating a wide client base, and now you want to benefit from those assets, you can do it. That makes you an agency, and you should start thinking like an agency. What services are you offering to translators (marketing, client management, project management) and what services are you offering to clients?

But if you're not ready to make the transition to being a professional outsourcer, then I would recommend just sticking to what you know. Take fees commensurate with the services you provide, and don't think of a job passed to another translator as a job lost. Think of it as a relationship built.


Contracts, for example EU-contracts, have turned into commodities. The EU might offer generous and taxpayer-financed rates, some agency will take on the job, will promise the coolest translators on the planet, will outsource the project to some company who claims that they are the coolest translators ever, this company will find some translators who in return will forward the job to some colleagues who happen to be twiddling their thumbs.

AND EVERYONE TAKES THEIR CUT.

Then highly sophisticated EU-projects that started out as 20 or 25 cent/word demanding jobs end up being done for 6 cents/word because working for the EU is cool and will prop up any CV.

Who cares about quality.


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Rifraf
Local time: 12:20
The question asker is no longer in the Proz-database Jul 24, 2012

This "user" is no longer in the Proz-database.

I have to say that I do find it amazing that so many people bother answering such a question. The person obviously only registered on Proz to get an answer to his question.

Why help so many of these unqualified newbies? The translation market is already overfloaded with wannabe translators/Internet agencies as it is!


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Samuel Murray  Identity Verified
Netherlands
Local time: 12:20
Member (2006)
English to Afrikaans
+ ...
How it is supposed to work, versus... Jul 24, 2012

Nicole Schnell wrote:
You have to calculate the time you will need to handle all of the efforts taken in-house - preparing files, the time needed for communication, editing, QA, administration and bookkeeping, file backup, etc.


Yes, this is what we tell beginner translators too, when they ask questions about calculating a rate. But in the end none of these calculations really contribute to the rate the translator decides on. Instead, the rate new translators choose is usually based simply on the rates of other translators and on various rules of thumb.

The same applies to finder fees, introduction fees, etc. You can calculate yourself to death, or you could go for the "what seems most fair to both" or "what is most common in the world" approach.

Also, I do believe that the percentage fee approach (as opposed to a once-off flat fee) is more fair to both parties. The reason is that the colleague can't know for certain how much work he is going to get from that new client. It is difficult to establish the monetary value of the referral beforehand. However, the value of the referral is directly proportional to the amount of income that that referral generates for the colleague.

With the percentage fee approach, the referring translator is assured that he gets no less from the referral than it is worth, and the colleague is assured that he pays no more than the referral is worth.

Mere job-forwarding and taking a "cut" is disgraceful. ... Your idea of "taking your cut", simply because you set up a contact ... is disturbing. Sorry, it is.


I see no disgrace in charging an introduction fee, whether based on percentage of income or a flat fee. I certainly don't charge such a fee (I refer translators and colleagues to each other as a gesture of good faith), but I don't think it is disgraceful to charge for it.

Here's something that often happens in the hotel industry: You arrive without booking at a hotel that is full. The hotel manager then refers you to another hotel (which is unrelated to his hotel), and gives you a discount voucher for that other hotel. In reality, the discount voucher doesn't really entitle you to a discount (or the discount is very little), but it helps both hotels keep track of who referred whom, since customers are more likely to hand over a discount voucher than to say "I was referred to you by hotel X". At the end of the month, the referred hotel pays a referral fee to the referring hotel, based on either the number of referrals or the income generated from it. There is nothing disgraceful about this, and neither hotel will go bust because of it. The only requirement is that both hotel managers are honest about their referrals (or have some kind of system in place that monitors it), and both parties profit from the arrangement.


[Edited at 2012-07-24 08:25 GMT]


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Nicole Schnell  Identity Verified
United States
Local time: 03:20
English to German
+ ...
There is one great way to figure it out Jul 24, 2012

Samuel Murray wrote:

Yes, this is what we tell beginner translators too, when they ask questions about calculating a rate.


Outsource one or more projects to your own, large agency client. You will learn A LOT of things. I have outsourced to the three largest clients of mine, and I can only recommend any aspiring outsourcer to do the same. The experience is priceless.


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AndersonT  Identity Verified
United States
Member (2010)
German to English
This, so much this... Jul 24, 2012

Nicole Schnell wrote:

Contracts, for example EU-contracts, have turned into commodities. The EU might offer generous and taxpayer-financed rates, some agency will take on the job, will promise the coolest translators on the planet, will outsource the project to some company who claims that they are the coolest translators ever, this company will find some translators who in return will forward the job to some colleagues who happen to be twiddling their thumbs.

AND EVERYONE TAKES THEIR CUT.

Then highly sophisticated EU-projects that started out as 20 or 25 cent/word demanding jobs end up being done for 6 cents/word because working for the EU is cool and will prop up any CV.

Who cares about quality.


This should be stickied on the front page of the site, no kidding. It's basically the state of the industry in a few sentences...


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