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The proz.com clearinghouse membership-option.
Thread poster: Williamson

Williamson  Identity Verified
United Kingdom
Local time: 07:16
Flemish to English
+ ...
Mar 1, 2008

Nowadays proz.com is a venue where clients and translators/interpreters meet. Just an idea, but what law forbids proz.com to be a clearing-house for translations/interpreting assignments posted on its website.

It would work this way: An outsourcer posts a job on Proz.com and gives an estimated value of the assignment. The outsourcer pays this to the “Proz.com clearing-house” and posts its assignment with the option to tick:”Proz.com clearinghouse verified” or something like that. Proz.com put the money aside and gains interest on this sum.

Upon delivery the translator sends the translation to Proz.com as well as the sum earned with his/her assignment. Proz.com requests the remainder and pays the translator the sum received from the outsourcer. Has the outsourcer paid too much, Proz.com reimburses the outsourcer. In order words, Proz.com functions like a kind of clearing-house for translators/interpreters.

This system would create a win-win situation, both for Proz.com and the members. Proz.com would earn the interests and could create something like a clearing-house memberships which costs a small extra. The member would be sure to get paid. It might even create an extra job. Nobody looses, because the amount advanced to proz.com otherwise remains on the outsourcers account. Proz.com might even function as an arbiter should disputes occur.

Another advantage is that money for projects would really be available and you not get messages from agencies like: “We have not yet been paid by our client, so we can not pay you until we receive payment from our client”.

No U.S.-or European antitrust law forbids this system .It is just an idea. Further positive/negative feedback would be welcome. I have already guessed one feedback: I would rather handle my money-affairs myself.


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Nicole Schnell  Identity Verified
United States
Local time: 23:16
English to German
+ ...
You don't really like being self-employed, don't you? Mar 1, 2008



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Astrid Elke Witte  Identity Verified
Germany
Local time: 08:16
Member (2002)
German to English
+ ...
Actually, it's not a bad idea Mar 1, 2008

It is in fact quite a good idea, given the relatively high risk of accepting a job advertised on proz.com.

The reason why there is a high risk of not getting paid is that the outsourcer is asking for a new supplier, in many cases for a one-off job. As we all know, the company which outsources the job has no particular reason to pay the supplier if it is unlikely to require the services of the same supplier again, for one reason or another. In many cases that situation applies.

From personal (rather bitter) experience, I can say that I have seldom been paid for my work by an agency which did not need my services a second time, e.g. one which does not normally operate in my language pair. In Germany at least, there appears to be no way at all to make an outsourcer pay for a service, but only for an item. Therefore the risk of accepting a job advertised by an untested agency is almost too high. In those circumstances, your idea seems good, and also means that the outsourcer can find someone to do the work.

Astrid


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xxxmediamatrix
Local time: 03:16
Spanish to English
+ ...
One potential problem ... er... make that two ... Mar 1, 2008

I'm not privvy to Proz.com's financial status, but one significant pre-requisite for such a system is that the clearing-house must be able to back up its service with sufficient (and proven) funds to ensure it still works, and that there are no losers, if the system 'crashes' (regardless of the cause).

...

A second is that most clearing-house schemes I've seen in operation (and there's one with which I am especially familiar working behind the scenes in support of TV news, sport and entertainment programme exchanges seen by every European television viewer, every day...) are run by and on behalf of members who all have a vested interest - backed by a significantly-large financial investment - in making sure it works and works properly.

I don't think any web-based set-up such as Proz.com could realistically be expected to run such a system for and on behalf of people (translators, agencies, clients) that owe to this site no more allegiance that that represented - at most - by a few dollars' annual membership fee.

MediaMatrix


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Marina Soldati  Identity Verified
Argentina
Local time: 03:16
Member (2005)
English to Spanish
+ ...
Freelancers site Mar 1, 2008

Good afternoon,

Williamson wrote:

Nowadays proz.com is a venue where clients and translators/interpreters meet. Just an idea, but what law forbids proz.com to be a clearing-house for translations/interpreting assignments posted on its website.

I


There`s a freelancers site, mainly for programmers, that works this way. A person/company posts a job; once a bid is accepted he/it "deposits" the money which is held until the project is delivered and accepted by the poster. Then, the site sends the many to the freelancer, charging 15% for the service + transfer costs (Paypal, Western Union or wire transfer). I don´t know whether I can post the web page name here, as there are also translation jobs...

I think this idea has been suggested before and rejected by the staff, but I can´t remember why.

Marina


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Charlie Bavington  Identity Verified
Local time: 07:16
French to English
Subsequent jobs? Mar 1, 2008

I'm sure the site won't do it, but FWIW I can see some merit in the idea. The fact that other such schemes appear to operate successfully would indicate that it could work.

One thing I would like to know - perhaps those with experience of other sites that operate such schemes could answer? - is what happens for any subsequent jobs?

Are the two parties allowed to continue their business relationship "away" from Proz, or must any and all subsequent assignments also go through this system?


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Williamson  Identity Verified
United Kingdom
Local time: 07:16
Flemish to English
+ ...
TOPIC STARTER
Moneybookers/Paypal. Mar 1, 2008

I was wondering whether money-transfer systems like Paypal or Moneybookers are backed up by enough funds in the case they go broke? They are not exactly banks either?
It was just an idea to limit the risks of transactions which come about through this website and weed out the "cowboys" or the fly-by-night agencies, who can not prove that they have enough captial to finance at least 1 project. With such a system the outsourcer has to be solvent for at least a part of 1 deal.
Another idea is that as part of the system, the website teams up with one or two worldwide reknowned credit-collection agencies just like they team up with two particular producers of CAT-tools, well known to all who visit this site. If they can make publicity for SdlTrados and Wordfast, why can't they make publicity for say Dun and Bradstreet and get a %-age per click-through?

How strong Proz.com financially is, can normally be found in their annual accounts, which have to be published somewhere on this planet.

Of course, those who wish, can always opt out of the system and arrange their dealings directly.




[Bijgewerkt op 2008-03-01 20:27]


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Marina Soldati  Identity Verified
Argentina
Local time: 03:16
Member (2005)
English to Spanish
+ ...
Don´t know for sure Mar 1, 2008

Charlie Bavington wrote:


One thing I would like to know - perhaps those with experience of other sites that operate such schemes could answer? - is what happens for any subsequent jobs?



As far as I know, in the site I mentioned, all communication between job poster and vendor is carried through the site.
I`ve never used the system myself, but I think you never know who the poster is, so subsequent jobs are held through the site as well. There´s no membership fees, I believe, so the 15% fee is the only money the get.

This system might work with direct clients; but agencies, always offering to pay 30, 45 or even 60 days after invoice, would not be willing to pay in advance.

My 2 cents.
Marina


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xxxBrandis
Local time: 08:16
English to German
+ ...
what relevance has it to do with self employment Mar 2, 2008

Nicole Schnell wrote:

you cannot beat up a woman outsourcer because It´s a woman. The principle williamson suggests has part element truth in it. Brandis


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ViktoriaG  Identity Verified
Canada
Local time: 02:16
English to French
+ ...
Not sure Mar 2, 2008

I don't like the idea that the outsourcers/clients would be telling the translators how much their work is worth. Goodbye negotiation...

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xxxBrandis
Local time: 08:16
English to German
+ ...
it is not just mb or pp my friends Mar 2, 2008

Williamson wrote:

I was wondering whether money-transfer systems like Paypal or Moneybookers are backed up by enough funds in the case they go broke? They are not exactly banks either?
It was just an idea to limit the risks of transactions which come about through this website and weed out the "cowboys" or the fly-by-night agencies, who can not prove that they have enough captial to finance at least 1 project. With such a system the outsourcer has to be solvent for at least a part of 1 deal.
Another idea is that as part of the system, the website teams up with one or two worldwide reknowned credit-collection agencies just like they team up with two particular producers of CAT-tools, well known to all who visit this site. If they can make publicity for SdlTrados and Wordfast, why can't they make publicity for say Dun and Bradstreet and get a %-age per click-through?

How strong Proz.com financially is, can normally be found in their annual accounts, which have to be published somewhere on this planet.

Of course, those who wish, can always opt out of the system and arrange their dealings directly.




[Bijgewerkt op 2008-03-01 20:27]
I know a time , when the clients used to check telephone books seek addresses and come to our office in the back yard in Berlin/ XBerg and deposit 25% upfront, and discuss and pay in full while on the pick up. I guess internet has changed many things. We used to go for excellently home made conneloni in the evening with the client and used to have intelligent discussions ascertaining his true requirement. Guess those times will never come back. Today we still do conneloni and the customers show walls. Brandis Guess somewhere along the internet development the culture is suffering. So much for technology.


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xxxmediamatrix
Local time: 03:16
Spanish to English
+ ...
And two more for good measure (potential problems, that is...) Mar 2, 2008

The proposed scheme would in effect introduce a new 'middle-man' in the classic client/agency/translator relationship.

'middle-men' are renowned for several things, none of which is especially beneficial to the service provider, amongst which:

- Taking a sizeable slice of the income/profit (as the agencies do already). Williamson generously suggests that members would be willing to pay extra for access to this service - thereby cutting their net income. Wierd logic - in an uncertain attempt to reduce abuse by outsourcers who rip off translators you want to increase your own overheads; surely the funds would be better spent using the due process of law to defend your interests as and when a problem arises; or on learning the basics of running a small business. And of course the scheme could only be financed by the translators anyway - what client, agency or outsourcer is going to pay to provide a service that only exists because some of those same clients, agencies and outsourcers are liars and cheats? You might as well invite bank robbers to fund the prison service!

- Passing the buck when something goes wrong. If stories on this forum are anything to go by most agencies in this business systematically passs the buck in the translator's direction. There's no reason why a proz.com clearinhghouse would systematically be any different. After all, many of its paying members are agencies/outsourcers, not translators, aren't they? So where do allegences lie? Like I mentioned previously, a clearing-house only works properly when it is in the best interests of all the participants to make sure it works.

- They take time to function - which in this context will eat into the already tight deadlines now prevalent in this business.

I conclude that any such extra tier in the system would be an excessive price to pay for an ill-defined advantage regarding occasional payment problems affecting a sector of the translation profession that has knowingly and voluntarily (but perhaps blindly) embraced the least-secure of all the employment opportunities open to language professionals. In other words: you chose to be a freelancer = you chose to take risks.

On reading the proposal again, I find the scheme has much more in common with an "agency" than it does with a "clearing-house". Clearing-houses are normally set up in areas of business where where is a reasonably balanced flow of goods/services and funds (i.e. trade) in both directions - such as currency exchange. The benefits are most apparent when there is:

a) Scope for reducing the number of payments passing through expensive international banking systems (e.g. clearing all currency exchanges involving a particular source/destination in bulk once per day/week or whatever rather than handling each one separately);

and/or:

b) The balance of trade between two traders is roughly even and the (occasional) banking transactions only need to cover the residual imbalance (thus requiring the transfer of smaller amounts of money, possibly with less urgency).

Clearly, neither of these conditions is likely to arise in our business. As has been mentioned elsewhere, proz.com job offers mostly fit in the 'occacional' category, implying that there will be little or no scope for transaction grouping. And translation is a one-way trade: Clients 'buy' - we, as translators, 'sell'. The trade in the other direction is vanishingly small. And so, too, is the potential benefit of any clearing scheme in this business.

MediaMatrix


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xxxBrandis
Local time: 08:16
English to German
+ ...
so what about the net income... Mar 2, 2008

why should it cover any services. Services are added partm, , net stay with the translators including 3% 5% whatever pp or proz. or any other system charges for the services. Afterall the service is not part of traslation. Guys and ladie and gentlemen this is a repreated discucssion that never finds a satisfactory end. So what are we going to do about it. Brandis

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Heike Behl, Ph.D.  Identity Verified
United States
Local time: 23:16
Member (2003)
English to German
+ ...
what's in it for the agencies? Mar 3, 2008

What would be the added value/incentive for agencies to pay up front?

They lose the interest on the money and they still risk that the translation might not be up to snuff. If this deal came with a guarantee of 100% satisifaction...

What are their options in regard to unsatisfactory translations? Somebody needs to decide whether their reclamations are justified and justify a reduction in pay for the translator. Which requires an independent body of multi-lingual experts accepted by both clients and translators.

It would also require a complex contract set up with every translation regulating all the ifs and whens to cover all bases. And this contract would have to be identical for all transaction if there should ever be a chance to enforce it on a larger scale. Otherwise, agencies could still include loopholes in their agreements that would allow them to withhold payment under all sorts of conditions and a payment up front wouldn't change anything.

That is, the agencies give up their sovereignty over their own agreements and terms and conditions in regard to payment, reclamations etc.

Why would any of the translation agencies or direct clients even remotely consider being part of something one-sided like that?

How big a problem are non-paying agencies generally anyways? (Has this been a poll in the past? Like: How many times in 2007 did you not receive payment for a translation project? I'll post it...)
Generally, established translators work with regular clients, so payment problems shouldn't be such a big issue anyways.


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Goran Tasic  Identity Verified
Serbia
Local time: 08:16
English to Serbian
+ ...
I can only add... Mar 3, 2008

...that the best response/question is given by Nicole Schnell.

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