Surviving in a world of competitive-rate agencies
Thread poster: Vincent Lemma

Vincent Lemma  Identity Verified
Italy
Local time: 13:32
Member (2008)
Italian to English
+ ...
Oct 16

Hello all,

As one can guess, the topic is pretty straight forward. There are numerous translation agencies offering truly competitive rates simply because of the amount of work that they have as opposed to the single freelance.
I feel that this makes it difficult not only to obtain direct customer, but also to continue working at a reasonable rate all together.

Most certainly, I am not talking about agencies hat turn out poor quality material, but about those that are able to provide good quality with fast turnaround.
While it is probably not the place of a single freelance to compete with these enterprises, I feel that it is also unjust to be have to drop rates. Then again, maybe this is the overall trend that the industry is taking.

Specialization can certainly be key to securing a greater amount of work, but again, I feel that we all too are forced to undercut the value of our knowledge.
This is true, especially, when approached by agencies in countries such as India and China, which seemingly offer fine services, have plenty of work, but offer poor rates to translators.

As a rule, I tend to steer clear of these agencies, but I must admit that things are not getting any easier.

Can anyone relate to this and what are your views on the matter?

Kindly,

Vincent

P.s. I was reading an interesting post on a forum discussing future technologies and how it will impact the translation industry. If anyone is interested: http://milanlanguageservices.com/translatingeconomist/?p=189

Also:
https://patenttranslator.wordpress.com/2014/11/18/advantages-and-disadvantages-of-the-corporate-translation-agency-model/



[Edited at 2017-10-16 11:03 GMT]


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Dan Lucas  Identity Verified
United Kingdom
Local time: 12:32
Member (2014)
Japanese to English
This is my truth, tell me yours Oct 17

Okay, as nobody else has commented, and because I have just finished a couple of deadlines and am feeling frisky, I will bite.

I don't have time to do more than quickly scan the linked articles - it is beyond me how a supposedly busy patent translator has the time to write screed after screed, week after week, on basically the same two or three subjects - but you and he are facing the same problem.

Neither of you seem to accept certain basic economic concepts, one of which which you actually touch on in your post when you say "simply because of the amount of work that they have". "Simply"? That simple concept is what we call the advantage of economies of scale, which is fundamental to modern industry. Yes, it is indeed unlikely that you will be able to compete head-on in that particular part of the business where low costs are important.

From "craft" to "industry"
As I see it, translation has expanded away from being a kind of craft enterprise conducted in tiny workshops, and towards something like a modern industry that uses automation to achieve high volumes at low costs. What you have seen is translation providers moving through the Ford Model T stage of the industry. Note that I said "expanded" because the previous approach to translation still exists, but it is not growing as rapidly as the new approaches, which are based on heavy use of CAT tools and automation, including machine translation.

It is instructive to note that a hundred years after the Model T, the automobile market is not only a few orders of magnitude larger, but that it remains tremendously diverse. At the bottom end we have cars manufactured in developing countries that often do not meet standards for developed country markets. At the top end you have cars costing hundreds of thousands of dollars and delivered in small quantities to a super-luxury market.

A small supplier has no chance of being able to deliver a major subsystem to a mass-market vehicle manufacturer, because they are literally just too small. On the other hand, a small supplier may well be able to conduct lucrative business with a niche market vehicle manufacturer that only sells a few thousand cars a year.

Persistent demand for skills
Imagine that you are a leather worker in 1920 whose product has become too expensive to be included in a mass-produced car such as the Model T. Because of your high costs, Ford drops you as a supplier. If you don't change, you lose your job, and you rail against the iniquities of modern industry.

But leather has not disappeared from cars. It was there back in 1920 and it is here still, and high-end cars have always needed skilled leather workers. The stitching in some Lexus vehicles is still done by hand, by a small number of people in a single factory in Japan, for example. They have a pretty secure job, and that is what you might call the low end of the high-end.

Your patent translator finds himself, in effect, in the same situation is one of these skilled leather workers. He is working in a relatively exotic language pair, and within a fairly specialized area within that pair. You would think then that he would draw the obvious conclusions: that not every task in the chain of production is of equal value, that not every end product requires the same kind of tasks and that specialization protects the worker.

Drawing the wrong conclusions
Instead (and pardon me if I am misrepresenting him, but he is extraordinarily verbose and with only another 40 years of life remaining to me I do not feel I have enough time to read every polemic he has written) he seems to be arguing that the concept of modern manufacturing is fundamentally wrong and we should all go back to crafting items by hand in picturesque little cottages. People want to buy a car should go to one of these artisans and order the whole damn car, he argues.

That's not going to happen, and it's not going to happen for a number of very good reasons. Perhaps chief of these is the point that modern manufacturing processes may not produce the ultimate in quality for very small numbers of consumers, but they do allow a range of "good enough" levels of quality for a far larger market. As such, they contribute more to the general prosperity of mankind than any number of skilled craftsmen. An agency is like a car manufacturer: it brings together a number of skills, some of which are in-house and some of which are outsourced. In the specific case of translation these include marketing, document preparation, translation, proofreading, DTP, security, archival and so forth.

Making yourself troublesome to replace
Patent translator points out, I think, that translation cannot be achieved without the translator. This is a truism in the same way that saying that a car cannot be manufactured without the guy who tightens up the nuts on the wheels. It doesn't necessarily follow that wheel-nut guy gets to decide how the whole process works, or that he necessarily gets to decide how much he charges, because he is - ceteris paribus - an interchangeable part of the whole.

Of course, ceteris paribus is a foolish assumption, because you want to do as much as possible to make sure that you are not equal to other people. That is what competition is all about. The key issue is that the more difficult it is to replace a supplier (such as somebody who provides wheel-nut tightening services), the more money he can charge. However, the ceiling level will depend on the purchaser of his services, because every buyer has an upper limit beyond which they will not pay. That limit is far higher for a Ferrari than it is for a Ford. If your client is not prepared to pay more (you mention agencies in India or China), you should look for a better client.

Out-competing McDonalds
If you don't like my use of the automobile analogy above, take the fast-food market. Food is an interesting market because although people only need a basic diet to survive, what we see is that as soon as people have disposable income they are prepared to spend it on different food choices.

So, there is a market opportunity, or rather, there are many market opportunities. Nevertheless, if you intend to sell burgers and fries, and you set up next to McDonalds with the same price and a similar product and service, you are going to fail and to fail badly. That's a market which relies on low prices, speedy delivery and a certain kind of ubiquity.

Conversely, if you can differentiate your product, you certainly can make money, as attested by the recent emergence of a slew of fast-growing burger chains. Five Guys, Smashburger, Shake Shack and so on. How do you explain their success? How can they exist in a world supposedly dominated by McDonalds, Burger King and Wendy's? And yet they do, and they prosper. If you can differentiate, you can survive even in a brutally competitive market.

Maybe you don't want to be involved in burgers. Fine. Move upmarket and into the high-end restaurant business. Many millionaires have been made in this area the past decade or so, with people like (in the UK) Gordon Ramsay, Heston Blumenthal and Jamie Oliver are just the most conspicuous examples. There has been a ton of opportunity out there, if you are aware enough and ambitious enough to take advantage of it - and if your product is good enough. But you can't expect to run a fast-food place next door to a big chain and survive unless you can do something different to what they are doing.

A serious lack of business sense
I keep banging on and on and on about the concepts I have mentioned in this post because it seems to me that so few people on this forum understand how markets work and how businesses work. In fact, in many cases they seem to wilfully misunderstand.

  • We have participants here objecting to the cut and thrust of business negotiation, because they feel that discussing prices is beneath them. I've got news for you: it's entirely normal in most industries to negotiate on price.

  • We have members arguing that the same price should be charged for a product everywhere in the world. I've got news for you: differing prices for similar products in different places has been economic reality for thousands of years.

  • We have people observing that prices have fallen in some sectors and using this to argue that the entire translation market is doomed. I've got news for you: there is no single, monolithic translation market, but rather hundreds of markets of varying size, varying demand-supply imbalances and varying profitability.

  • We have translators noting that they can translate and wondering why they don't have lots of work. I've got news for you: doing the same thing as everybody else is not going to get you lots of work.

  • We have people asking why they aren't getting the high-end business. I've got news for you: the lucrative parts of any market are relatively small, and it is difficult to find and break into them, so most people will not.

    Argumentum ad verecundiam?
    Unlike some people here, and I suspect patent translator as well, I visited literally hundreds of organizations over a couple of decades in the financial markets and listened to what they told me about how they run their business and what has worked for them. The concepts I describe above are distilled from that experience, but are pretty much economic orthodoxy. They are not controversial in the slightest. And yet we have people trying to deny their validity, basically through repeated assertion rather than logic.

    TL,DR: nearly every significant market is segmented in some way, and translation is no different. Some markets offer plentiful opportunity, some markets offer less opportunity. There are thousands of niches out there. Find yours.

    Dan

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  • Tom in London
    United Kingdom
    Local time: 12:32
    Member (2008)
    Italian to English
    How to survive in a world of competitive-rate agencies Oct 17

    How to survive in a world of competitive-rate agencies:

    We live in a "civilisation" where everyone is expected to compete.

    The best way to survive is not to be cheaper than everyone else, but to be better than everyone else.

    Some agencies offer low-cost translations and then hope they can persuade us (the translators) to accept a low rate. In other words, we're the patsy in this situation.

    Never do this, dear colleagues. Don't be afraid to say NO.

    [Edited at 2017-10-17 10:12 GMT]


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    The Misha
    Local time: 07:32
    Russian to English
    + ...
    Just one other thing, Dan Oct 18

    I take my hat off to you, sir. I couldn't spell it out better myself:)

    Just one other thing:

    Dan Lucas wrote:

  • We have people asking why they aren't getting the high-end business. I've got news for you: the lucrative parts of any market are relatively small, and it is difficult to find and break into them, so most people will not.

    Dan


  • In my experience of 30+ years, the primary reason most in this business never make it into the high-end segment is that they are simply not good enough. No one is going to pay top dollar for a half-baked job or lack of proper diligence. Period. Yet, instead of striving to better themselves, folks call for a "revolution," no less, blaming anyone but themselves for the perceived "injustice" of the world. Worse still, this modern scourge is not limited to translation.

    I have already seen what a revolution leaves in its wake, and I do not care to repeat the experience.


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    Dan Lucas  Identity Verified
    United Kingdom
    Local time: 12:32
    Member (2014)
    Japanese to English
    Understanding what you don't understand Oct 19

    The Misha wrote:
    In my experience of 30+ years, the primary reason most in this business never make it into the high-end segment is that they are simply not good enough. No one is going to pay top dollar for a half-baked job or lack of proper diligence.

    I agree with this. Only the most competent 10% will get the real money, and I suspect that is the case in most professions. Most people do not realize that they are not as competent as they believe themselves to be - which is one aspect of the effect hypothesized by Dunning & Kruger.

    However, I would say there are many ways to be "competent," and technical ability is only part of it. One also needs to consider marketing, reliability, client management, negotiation skills, mental stamina and so on.

    But taken as an entire package, yes, only the top translators are going to get the very best wages. So, what percentage of ProZ.com forum members can realistically expect to be well paid? Certainly I would imagine it is a good deal less than 50%, and quite probably below 20%.

    Regards,
    Dan


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    Dan Lucas  Identity Verified
    United Kingdom
    Local time: 12:32
    Member (2014)
    Japanese to English
    One action Oct 23

    Tom in London wrote:
    Don't be afraid to say NO.

    Agreed. There are many skills that translators should develop in addition to translation, and various career strategies they should deploy, but in neither area can one realistically expect results for many months or even years.

    Conversely, if I had to choose one simple action that would generate the greatest benefits for translators in the shortest amount of time, it would be saying NO.

    "Say no to this" sounds like the title of a new thread...

    Dan


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    Chris S  Identity Verified
    United Kingdom
    Swedish to English
    + ...
    Transonomics Oct 23

    A few thoughts:

    Being better than everyone else is not an option for most translators.

    Most clients are not in a position to judge the quality they are getting, so the market is unusually imperfect.

    The individual cottage-industry translator cannot hope to compete with slick salesmen from mega-agencies undercutting them on price and outshining them on ISOness.

    I can't agree that falling prices for Fords will not affect prices for supercars to some extent.


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    Dan Lucas  Identity Verified
    United Kingdom
    Local time: 12:32
    Member (2014)
    Japanese to English
    Some insightful points Oct 23

    Chris S wrote:
    Being better than everyone else is not an option for most translators.

    No indeed, so most of us cannot expect to become wealthy from translation, or even fairly well-off. If you are making an income that is equal to or better than the median of the country in which you live, you're probably not doing too badly.

    Most clients are not in a position to judge the quality they are getting, so the market is unusually imperfect.

    I think quality is not that difficult to evaluate if you put some effort into it and take a systematic approach. However, just as with your comment about translators above, being better than a majority of the competitors is not an option for a majority of agencies. Most are, at best, average, just like the translators with which they work. EDIT: It's worth noting that market inefficiencies can cut both ways, and help as well hinder the freelancer.

    The individual cottage-industry translator cannot hope to compete with slick salesmen from mega-agencies undercutting them on price and outshining them on ISOness.

    Agreed, but I propose one important amendment. "The individual cottage-industry translator cannot hope to compete with slick salesmen from mega-agencies undercutting them on price and outshining them on ISOness at clients who regard that as important." This latter category probably does include many very large companies. That still leaves plenty of potential clients, either direct or via agencies.

    I can't agree that falling prices for Fords will not affect prices for supercars to some extent.

    Well, this is a difference of opinion that might be hard to bridge. My view is that, unless there is a dramatic change in their personal situation, a consumer who has been on the verge of pulling the trigger on a Porsche 911 GT3 RS does not suddenly decide that a Fiesta ST offers them everything they need. This is about more than pure cost, it is about the kind of person they perceive themselves to be, and the actions they perceive to be consistent with that person. I can see a consumer deciding that they prefer an Audi R8 to the 911, but not suddenly deciding that a hot hatch is perfectly acceptable.

    I speak here of human individuals, but organizations not infrequently have a kind of self-image, often quite a strong one. The financial crisis did actually constitute "a dramatic change" in the situation for many companies, and they cut costs in all sorts of areas, even sacred cows such as research and development. So in extreme conditions of that kind, certain entities may actually drop from supercar to performance saloon, or similar.

    Dan

    [Edited at 2017-10-23 15:09 GMT]


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    Maxi Schwarz
    Local time: 06:32
    German to English
    + ...
    My reality Oct 23

    Over a number of years, ordinary people and small businesses have become more able to go straight to the source. The proportion of end clients over agencies has increased tremendously. There are steady clients, agencies, whom I have worked for over decades, and this has not changed. I get new end clients writing me to say "You have been recommended to me by (name)." Occasionally a new agency, usually small, will introduce themselves the same way.

    For perspective, we have to look at some realities. For the large agencies, the new agencies, the companies with "fast and cheap", and maybe agencies in general, the biggest time expenditure is administration. Each separate project is admin.-heavy. One 100,000 word project is not the same as one hundred 1,000 word projects. The bigger, and more automated and streamlined, the better for them. Not for me. My time expenditure is the translation. I am also maintaining my reputation for quality and reliability. The idea of a "large company" giving massive amounts of regular work is presented as if desireable. Putting all my eggs in one basket is scary, not good. Doing so at a discount is foolish.

    Clients come to me above all for professional quality translations. Here the point about ability that was mentioned comes into play. They also know that if something is "off" about their request, I'll advise them. A translation by a Canadian certified translator, to be read by German officials, may be rejected as they want German sworn translators. I'll tell them that. I make sure to understand the client's needs fully; will communicate as necessary; will guide a less experienced agency if needed. I bring in my full understanding, training, and experience. This is something that many of the newer agencies can't do. I've talked to PMs who are following a script they must adhere to, and they do not understand the profession.

    90% of my material is not in electronic form. A lot of it can't be. You don't get driving licenses, letters of recommendation, report cards and other small documents in electronic form. CAT tools are not suitable for these things. Before anyone says anything, I don't just do small translations. But what I offer is not typically what is there among the type of "competition" mentioned in the article.

    This is my reality.

    Btw, I do not have a "cottage industry", and professional freelance translators do not practice a "cottage industry". You would not say that a business consultant, or a chartered accountant, as running a "cottage industry". This conjures up someone selling straw hats with dried flowers that their grandmother taught them to make.


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