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How much money goes to the agency, the PM and the translator?
Thread poster: Aditya Ikhsan Prasiddha

Aditya Ikhsan Prasiddha  Identity Verified
Indonesia
Local time: 11:42
Member (2012)
English to Indonesian
Apr 15, 2013

Hi everyone,

Assume an agency charge $xx for a word. How do the agency divide it to themselves, the PM and the translator? Could anyone please give me rough percentages? Thank you so much.


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Aliseo Japan  Identity Verified
Japan
Local time: 13:42
Member
Italian to Japanese
+ ...
In Japan translation companies do charge a lot Apr 15, 2013

I don't know if the ongoing crises has made things worse for translation companies forcing them to reduce their profit, and whether additionally to their salary PMs receive a bonus on each project they handle, particularly when they are able to squeeze an extra profit out of the translator rate. I can only tell you that usually translation companies in Japan just double (or more) translators' rate when they bid directly, or less or even much less when there are one or more additional middleman in the process.

But I've heard that in other countries they charge less.

Mario Cerutti


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Marie-Helene Dubois  Identity Verified
Spain
Local time: 05:42
Member (2011)
Spanish to English
+ ...
From what I can gather Apr 15, 2013

the translator and the proofreader will usually get between them up to two thirds of the final rate paid to the client i.e. if the agency charges EUR 0.15 per word, EUR 0.10 will be split between the translator and proofreader. I would imagine that some of the larger volume-based agencies try to attain a margin of 50%. I'm not 100% sure about this as it's purely speculation on my part based on agencies whose rates to the end client I'm aware of, which isn't many.

I'm not sure how PMs get remunerated, whether it's on number of jobs placed based on targets or whether it's for getting the job done for less than the average rate. However it works, I would imagine that their percentage of performance-related pay is negligible because presumably they get a wage and the other benefits of fixed employment such as paid holidays and paid sick leave etc.


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Aditya Ikhsan Prasiddha  Identity Verified
Indonesia
Local time: 11:42
Member (2012)
English to Indonesian
TOPIC STARTER
freelance PM Apr 15, 2013

I know some agencies who use freelance PM's though...

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Tomás Cano Binder, BA, CT  Identity Verified
Spain
Local time: 05:42
Member (2005)
English to Spanish
+ ...
Should be none of our business Apr 15, 2013

I really think we should not worry much about how much money agencies do with our work. What should matter to us, and this is something we should actively pursue and promote, is what is a reasonable, sustainable rate for our work, considering all factors: non-continuous nature of our work, number of possible working hours per day, expenses of being a business, continuous training, requirement to save for a future after retirement...

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Aditya Ikhsan Prasiddha  Identity Verified
Indonesia
Local time: 11:42
Member (2012)
English to Indonesian
TOPIC STARTER
It's useful Apr 15, 2013

Tomás Cano Binder, CT wrote:

I really think we should not worry much about how much money agencies do with our work. What should matter to us, and this is something we should actively pursue and promote, is what is a reasonable, sustainable rate for our work, considering all factors: non-continuous nature of our work, number of possible working hours per day, expenses of being a business, continuous training, requirement to save for a future after retirement...


In my opinion it's useful for knowing the highest fee that we can receive from an agency, so then we do not quote too low or too high.

[Edited at 2013-04-15 09:21 GMT]


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Catherine De Crignis  Identity Verified
France
Local time: 05:42
Member (2012)
English to French
+ ...
Agree with Tomás Apr 15, 2013

Hi,

I think Tomás is right, although the question asked is interesting, it can lead to a slippery slope. Rates we charge must take into account the costs on our side. Whatever we think -rightly or wrongly- is the highest rate an agency is willing to pay is unlikely to bear any resemblance to these costs put together. An agency described on the BB as "on of the best agencies" tried insistently to make me reduce my rates. When I pointed out that this policy led them to contacting me late at night with urgent proofreading work (ie. trying to minimise the damage to client reputation after a cheaply paid job had been botched) they swore to never work with me again. Needless to say "good riddance" is what I thought.
On the other hand, if the thinking goes "they make so much from the end client, why don't I work on developping a direct clientele, or this is why I will not reduce already competitve rates", then the question asked becomes interesting.

Regards,
Catherine


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accents_ie  Identity Verified
Local time: 04:42
English
+ ...
Agency rates Apr 15, 2013

You assume agency can charge final client as much as they want?
Absolutely NO/ Most clients trying to get at least a few quotes from different agencies and job will be placed with a best/lowest price/ So? I must to add abot 30% on your price at least/ And if someone beliewe we get a job for asking Euro 0.15 per word - it is wrong/ Our competitors (some other agencies) are offering even Euro 0.05 per word per any European language and they get a jobs! And there are many translators who offer rates from Euro 0.03 per word across Western Europe too. How to be competitive and earn money? Agencies can not fi[ high prices any more. World is changed.


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Samuel Murray  Identity Verified
Netherlands
Local time: 05:42
Member (2006)
English to Afrikaans
+ ...
Estimates vary Apr 15, 2013

Aditya Ikhsan Prasiddha wrote:
How do the agency divide it to themselves, the PM and the translator?


This question crops up every now and then, and the estimates vary wildly. Some say as little as 20% goes to the agency. Some say as little as 20% goes to the translator.


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Tomás Cano Binder, BA, CT  Identity Verified
Spain
Local time: 05:42
Member (2005)
English to Spanish
+ ...
You are not the agency Apr 15, 2013

Aditya Ikhsan Prasiddha wrote:
In my opinion it's useful for knowing the highest fee that we can receive from an agency, so then we do not quote too low or too high.

I don't think professionals like doctors, lawyers, counsultants, etc. --i.e. the people we should be comparing ourselves to-- take their customer's expected gross profits into account when they decide a rate for their services.

Our customer's profits (be it agencies or direct customers, it really does not matter) should not be a component in our rate calculation. As independent business owners, we are the ones who have to decide our:
- Costs (social security, hardware and software, training, supplies, communications, electricity, association fees, translator portal fees...)
- Available sources of income (basically the number of days we are able to work every year), and
- Expected profits (they money we need in our private life every month, plus the money we need to save for our retirement or for a potential disability situation).

These factors, and not our customers' cost factors and profits, are the things we should consider. The sooner we get used to this idea, the sooner we will all enjoy a sustainable life as translators.


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Kevin Fulton  Identity Verified
United States
Local time: 23:42
German to English
Agency pricing based on a variety of factors Apr 15, 2013

In very broad strokes, an agency's price to a customer is based on the services rendered and the expected profit. The agencies I deal with frequently offer value-added services to the translations, such as DTP, subtitling, voice-over, etc., all of which are built into the price quoted to the customer. The good agencies aren't cookie-cutter businesses. And, believe it or not, they not infrequently offer discounts to high-volume customers, especially for repetitive material not requiring post-translation formatting or serious editing, such as data in customer complaint forms, internal e-mail, etc.

As long as I'm paid a fair rate for my work, I really don't care how much an agency charges its clientele, or what its final profit is. My price is based upon the value I provide, not the agency's bottom line.


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Marie-Helene Dubois  Identity Verified
Spain
Local time: 05:42
Member (2011)
Spanish to English
+ ...
Burying heads in the sand Apr 15, 2013

I'm not sure is necessarily the best approach. Of course if you are working as a freelance translator, you are forging a business relationship with agencies based on mutual agreement. Clearly there is no need to be unduly influenced in your pricing by the pricing policies of agencies which can vary wildly depending on the services and quality offered and depending on their location.
I don't however think it's a bad idea to try to gain an understanding of the bigger picture and of how the whole business model works...since you're part of it, you may as well understand what you're part of.


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LEXpert  Identity Verified
United States
Local time: 22:42
Member (2008)
Croatian to English
+ ...
What is a translation worth? Apr 15, 2013

Tomás Cano Binder, CT wrote:

I really think we should not worry much about how much money agencies do with our work. What should matter to us, and this is something we should actively pursue and promote, is what is a reasonable, sustainable rate for our work, considering all factors: non-continuous nature of our work, number of possible working hours per day, expenses of being a business, continuous training, requirement to save for a future after retirement...


How long is a piece of string?
Tomas, I generally agree. However, perhaps it would be worthwhile to at least give some thought to what our work might actually be worth to the end user. Not long ago I got roped into editing a translation after the agency declined my translation quote. I usually avoid such situations, but the rate offered (to me) for the translation wasn't nearly as laughably low as some of the much-mocked rates mentioned here (one might even say it was at the bottom of the acceptable range for an easy text), so I figured, how bad could the translation to edit be? Famous last words, it turns out! It wasn't worth the paper it was written on (so to speak), with various safety instructions so grossly mistranslated that if anyone had actually followed them, serious injury or death, as well as massive property damage, would have resulted.

At a minimum I saved the agency and end client severe embarrassment. Potentially I saved them hundreds of thousands or even millions of dollars in liability. In situations like those, a formulaic calculation of inputs and outputs is bound to leave one feeling underpaid.

Of course, if they had just paid my translation rate, I wouldn't have felt underpaid. Human nature I guess, even if it makes sense that fixing disasters should be much more expensive than just doing it right the first time.

[Edited at 2013-04-15 17:17 GMT]

[Edited at 2013-04-15 17:17 GMT]


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Katalin Horváth McClure  Identity Verified
United States
Local time: 23:42
Member (2002)
English to Hungarian
+ ...
Similar topic recently Apr 15, 2013

http://www.proz.com/forum/translation_project_vendor_management/246149-percentage_that_translation_agencies_charge.html

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Yasutomo Kanazawa  Identity Verified
Local time: 13:42
English to Japanese
+ ...
Agree with Tomas and Kevin Apr 16, 2013

Tomás Cano Binder, CT wrote:

Aditya Ikhsan Prasiddha wrote:
In my opinion it's useful for knowing the highest fee that we can receive from an agency, so then we do not quote too low or too high.

I don't think professionals like doctors, lawyers, counsultants, etc. --i.e. the people we should be comparing ourselves to-- take their customer's expected gross profits into account when they decide a rate for their services.

Our customer's profits (be it agencies or direct customers, it really does not matter) should not be a component in our rate calculation. As independent business owners, we are the ones who have to decide our:
- Costs (social security, hardware and software, training, supplies, communications, electricity, association fees, translator portal fees...)
- Available sources of income (basically the number of days we are able to work every year), and
- Expected profits (they money we need in our private life every month, plus the money we need to save for our retirement or for a potential disability situation).

These factors, and not our customers' cost factors and profits, are the things we should consider. The sooner we get used to this idea, the sooner we will all enjoy a sustainable life as translators.


It is not our business to find out how much agencies or PMs make.
I agree to what Tomas and Kevin wrote, and as long as my clients pay me the rate I charge, I don't care if my clients charge their end clients double or even triple the amount I charge. I have my own share which I get, and the clients have their own shares which they seem fit to get.


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