Maximum rates on proz
Thread poster: William Ploeg
William Ploeg  Identity Verified
Local time: 16:49
English to German
+ ...
Sep 16, 2004

Hi there
I have read in the FAQ that proz has introduced the system "max price = 2.5 times min price" to "exert upward pressure on rates". If I understand this right, this means that they wanted higher bids. Could somebody please explain this to me? Why does limiting the max rates exert upward pressure on rates? I mean, before somebody could have a minimum bid of $1 and a maximum bid of $100, for example, which makes an average of $50. But now, if I chose a reasonable minimum rate, let's say $0.08 than my maximum rate will be only $0.20 and so the average much lower. I don't really get it... math was never my favorite anyway But maybe, somebody can explain this system change to me. Thanks in advance.

[Edited at 2004-09-16 18:31]


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Alaa Zeineldine  Identity Verified
Egypt
Local time: 17:49
Member (2002)
English to Arabic
+ ...
Discourages ridiculous minimums Sep 16, 2004

It is a question of wording. Read the FAQ again. Here is part of it:

Therefore the following rules were introduced, to provide an incentive to enter minimum rates that are reasonably high:
(1) The maximum rate is a multiple of your minimum rate (currently: 2.5).
(2) You can not bid higher than your maximum rate

Another way to look at it is:

(1) The minimum rate cannot be less than 40% of your maximum rate.

So no one can keep their options totally open, bidding as high as they can when the outsourcer's choice is limited, but undercutting their colleagues in a more competitive bid.


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William Ploeg  Identity Verified
Local time: 16:49
English to German
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TOPIC STARTER
Why is bidding very low or high bad? Sep 16, 2004

Hi, thanks for your answer. But why is it bad

(1) to bid very low? Is this because you don't want dumping prices?

(2) to bid very high? If the client is willing to pay that much, why not?


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Ralf Lemster  Identity Verified
Germany
Local time: 16:49
English to German
+ ...
Various considerations Sep 16, 2004

Hi William,
What you need to bear in mind is that the rates system has several purposes, one of which is a filter for jobs notifications (to give you an example, if you enter a minimum rate of 5 cents, you won't be notified of jobs below that rate).

Also, I'm not sure why you're referring to a 'system change' - the rates system has been in place for more than a year...?

William Ploeg wrote:

Hi, thanks for your answer. But why is it bad

(1) to bid very low? Is this because you don't want dumping prices?

As Alaa suggested, please have a look at past forum discussions on this issue. ProZ.com is neither in a position to 'push' prices either way, nor can it impose a 'right' price level. What should be discouraged, however, is aggressive dumping by outsourcers, particularly if this is subsequently accompanied by payment problems. Hence the concept of requesting a minimum rate, which would be meaningless without an upper level that is linked (as explained in the FAQ).


(2) to bid very high? If the client is willing to pay that much, why not?

Sure, why not indeed? However, most jobs publicly posted tend to be priced more aggressively; according to anecdotal evidence, jobs placed directly (i.e. on a bilateral basis rather than by public posting) tend to be higher paid. (Note that due to the fact that ProZ.com does not exert control over the job assignment process, the site does not have comprehensive data in this respect.)


Best regards, Ralf


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William Ploeg  Identity Verified
Local time: 16:49
English to German
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TOPIC STARTER
Can't change to average once I have entered my rates Sep 16, 2004

Ok, I understand now. The problem is: once I have entered my own rates, I can't change to the other possibility (community's average) any more, because I HAVE TO enter my rates. Don't you think it should be possible to change the system at any time I want? Either I can enter my own rates or I take the community average.

And another question regarding to this: let's say the communities average minimum price (or my own) is 0.09. If a client posts a job and states a price that is below that, e.g. 0.08, what will happen with this posting? Will the poster get a message that this is not possible and that he has to chose a rate that is higher than that?


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Henry Dotterer
Local time: 10:49
SITE FOUNDER
This system encourages seriousness, reasonableness Sep 16, 2004

Hi William,

Good question.

In the past, there were a few people quoting very high rates to clients they felt might pay a lot, and very low rates to clients who they felt would not. We believe this haphazard approach, which resulted in both high ceilings and low floors, is not good for our community or industry.

We would like to encourage members to set rates at levels that create enough income for "both bread and holidays" and then--with reasonable degree of flexibility (ie. 250%)--stick to them. The rates system we put in place encourages this approach. With it, we do not dictate rates, but we do provide an incentive for members to set a reasonable range. How high or how low is still up to the individual.


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Ralf Lemster  Identity Verified
Germany
Local time: 16:49
English to German
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FAQ Sep 16, 2004

Hi again,

The problem is: once I have entered my own rates, I can't change to the other possibility (community's average) any more, because I HAVE TO enter my rates. Don't you think it should be possible to change the system at any time I want? Either I can enter my own rates or I take the community average.

Quoting from the FAQ:


5. Can I change rates once I have entered them?

After an initial one week period, rates can be modified only once every three months. Therefore, it is important that you put careful consideration into the selection of your rates. During the initial first week, you can edit your rates as often as you like.

If you like to remove rates entered in between, contact ProZ.com staff, using a support request.

And another question regarding to this: let's say the communities average minimum price (or my own) is 0.09. If a client posts a job and states a price that is below that, e.g. 0.08, what will happen with this posting? Will the poster get a message that this is not possible and that he has to chose a rate that is higher than that?

Posting jobs below the average minimum is possible, but the number of notifications sent out will be significantly smaller, possibly zero. This is indicated to the job poster.

HTH, Ralf


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William Ploeg  Identity Verified
Local time: 16:49
English to German
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TOPIC STARTER
Thank you for the information Sep 16, 2004

Hi Henry and Ralf. Thank you for the information. It's my first day as a platinum member - therefore all those questions
Thanks again and bye bye.


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Parrot  Identity Verified
Spain
Local time: 16:49
Member (2002)
Spanish to English
+ ...
I don't think this has been possible at any time Sep 17, 2004

William Ploeg wrote:

I mean, before somebody could have a minimum bid of $1 and a maximum bid of $100, for example, which makes an average of $50.


As I understood the system, the member who did not enter his rates was always subject to the subcommunity average. If the subcommunity you were bidding for had an average minimum of 0.08, your minimum was 0.08 and your maximum 0.20.

You could, of course, change your minimum to, say, 0.06 and have a maximum of 0.15. But you'd have to live with the changes for at least 3 months.

Reversing Alaa's wording on minimum being 40% of the maximum, the maximum (say, for rush jobs, number of words in excess of daily average, or especially sensitive jobs involving additional work) can be anywhere between 150% and 250% of the minimum - acceptable to most legal systems, with, as well, a view to overtime rates.

In a word, it was thought of quite seriously. Up to you to make implementation a serious matter.


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