Agency rates
Thread poster: Olly Pekelharing

Olly Pekelharing  Identity Verified
Netherlands
Local time: 09:00
Member (2009)
Dutch to English
Apr 11, 2016

Just noticed that an agency sent met their quote to their client by mistake. Their fee is twice mine, i.e. €0.22/source word. This gets me thinking: 'Shouldn't I be getting more of that?' Or do they need those 11 cents to cover their costs and be profitable? I'm not complaining about my income, but it never hurts to have more of it.

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Jan Willem van Dormolen  Identity Verified
Netherlands
Local time: 09:00
English to Dutch
+ ...
Payment for services offered Apr 11, 2016

This means that you are really paying the agency 11 cents per word. Whatfor?
This might include:
- finding clients
- discussing with clients how and what they actually want translated
- preparing files for translation, e.g. converting client files into two column Excel sheets
- finding a translator
- monitoring deadlines
- finding a reviewer
- reviewing your work
- maintaining translation memories and terminology
- dealing with obnoxious clients
and probably a few things more.

Now, some agencies do all of this, some don't. Depending on what they actually do, these 11 cents might be either well-spent or cruelly wasted.


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Tomás Cano Binder, BA, CT  Identity Verified
Spain
Local time: 09:00
Member (2005)
English to Spanish
+ ...
Usual percentage Apr 11, 2016

Yes, that has happened to me in the past. I also received the rates of Nordic languages by mistake, and they charged a lot more than myself.

Agencies have to cover for their expenses and they take the burden off you of looking for customers, dealing with their many different requirements, visiting them, etc. I do believe in reasonable margins for agencies. In a course I attended today, a seasoned PM explained that, from her experience, a frequent margin is to add 50% to the cost of their suppliers' (translators, revisers, DTP people...). This means that you get 66% of the price invoiced to the customer.


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Jack Doughty  Identity Verified
United Kingdom
Local time: 08:00
Member (2000)
Russian to English
+ ...
About par for the course Apr 11, 2016

Agency payments/charges ratio varies a lot of course, but charging twice as much as they pay is probably about average. They have overheads to cover, of course, and I'll refrain from commenting on how fair this is, I'm just saying it's nothing unusual.

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Thayenga  Identity Verified
Germany
Local time: 09:00
Member (2009)
English to German
+ ...
Common practice Apr 11, 2016

Since an agency - just like a translator - is a business, they do need to cover their expenses, perhaps including their employees' salaries. 50% of what they charge their clients seems rather fair. Anything more than that - and I've seen an agency paying a translator 15% of what their client pays them - is a little "dubious".

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LEXpert  Identity Verified
United States
Local time: 02:00
Member (2008)
Croatian to English
+ ...
Sounds fair Apr 11, 2016

50% sounds relatively reasonable. I too once saw the client invoice of an infamous exploitative agency whom I haven't worked for in years, and the markup was more like 200%. However, that included all sorts of itemized extra charges on top of the translation, such as editing, proofreading, formatting, etc., even though the translators generally got an earful from the PMs if the translation wasn't already flawless and near-perfectly formatted at the first stage.


[Edited at 2016-04-11 15:09 GMT]


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philgoddard
United States
German to English
+ ...
I used to work inhouse for an agency Apr 11, 2016

and we were charging about twice what the freelances charged us. This was a nice company that treated its translators well. Sometimes I was charging a 100% markup on my own translations, which was a bit galling.

I always say that if I'd ever succeeded in working entirely for direct clients, I'd be living in a house twice the size of the present one.

[Edited at 2016-04-11 17:35 GMT]


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Dan Lucas  Identity Verified
United Kingdom
Local time: 08:00
Member (2014)
Japanese to English
Apples to apples? Apr 11, 2016

philgoddard wrote:
Sometimes I was charging a 100% markup on my own translations, which was a bit galling.

Phil, was that like-for-like? I had envisaged direct client rates for translation, without review and revision of the target text against the source text, to be maybe 30% higher than for a good agency. Did this markup include revision or checking by somebody other than the translator or was this to cover project-management type services only? If the latter then that would indeed be lucrative...

Regards
Dan


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Maxi Schwarz
Local time: 02:00
German to English
+ ...
the only thing that concerns me ... Apr 11, 2016

is how much I charge. Agencies and end clients get charged the same thing because the quality of work I do is identical, the amount of time I spend is identical, and the care is identical. If an agency pays me $0.18/word and can then turn around and charge the end client $0.36/word well hats off to them. Otoh, if they do that they might induce end clients to look for translators directly, and I don't see that as as a problem.

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Olly Pekelharing  Identity Verified
Netherlands
Local time: 09:00
Member (2009)
Dutch to English
TOPIC STARTER
Note to agencies Apr 12, 2016

Well if 50% is standard industry practice then there can be only one conclusion: the more agencies pay their freelancers, the more they will earn themselves!


(I mean this sarcastically.)

[Edited at 2016-04-12 08:53 GMT]


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Robert Rietvelt  Identity Verified
Local time: 09:00
Member (2006)
Spanish to Dutch
+ ...
Well..... Apr 12, 2016

Olly Pekelharing wrote:

Well if 50% is standard industry practice then there can be only one conclusion: the more agencies pay their freelancers, the more they will earn themselves!


Yes, but there is an end to it. Following this philosophy, at the end they will loose all their clients, because they become too expensive. There also is something like 'competition' (= the reason that some of them are low payers)


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Sheila Wilson  Identity Verified
Spain
Local time: 08:00
Member (2007)
English
+ ...
The time to worry is when it far exceeds that figure Apr 12, 2016

Like when a Notary insisted on giving me his cheque for the agency that sent me to interpret for a house sale. It was for three times what I'd been paid and for that type of job there's precious little input from the agency needed - no proofreading, no file formatting, no TMs or glossaries... AND they got paid immediately whereas I was still expected to wait for my payment.

I've heard that a mark-up of a third to a half is within the expected range. But I've only seen the evidence that one time and it was a bit of a wake-up call. Yet another reason not to accept jobs for less than your "best rate" (to you, of course!) as you can be more or less guaranteed that the agency isn't going to be doing itself out of a good profit margin.


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Thayenga  Identity Verified
Germany
Local time: 09:00
Member (2009)
English to German
+ ...
Yes! May 18, 2016

Olly Pekelharing wrote:

Well if 50% is standard industry practice then there can be only one conclusion: the more agencies pay their freelancers, the more they will earn themselves!


(I mean this sarcastically.)

[Edited at 2016-04-12 08:53 GMT]


Good and logical idea. (Meant just as sarcastically.)


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John Fossey  Identity Verified
Canada
Local time: 03:00
Member (2008)
French to English
50% is pretty standard May 18, 2016

50% gross margin (the difference between the purchase and reselling price of a product or service) is pretty standard for any business that's going to stay in business.

If an agency is getting significantly less than a 50% margin, one effect will be that they won't be able to pay their translators on time when their client pays them late (or not at all). That working capital cushion has to come from somewhere.


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