Translation Rates: A Race to the Bottom?

I can’t blame clients for seeking out low translation rates. After all, there are only two ways for a business to make more money:

  1. increase revenue
  2. cut costs

And given that translation vendors offer wildly different rates for what clients assume is the same service, it’s no surprise that many buyers of translation services try to cut project costs by going with a low (or the lowest) bidder.

Rates for translation services are dropping, but don’t break out the party hats just yet.

But translation rates have been going ever lower in a seeming race to the bottom.

Unfortunately, this is a no-win situation, even for the client who ostensibly has saved a lot of money. (More on this later.)

What’s Worse? Losing a Bid or Losing Your Dignity?

Just this morning, we lost a bid on a project involving survey translation. The project went to a vendor that offered a price that we’ll never be able to beat.

I died a little inside when the client told me what the winning bid was less than half of what we had quoted—48%, to be exact.

So I emailed the client and told her candidly what my thoughts were. I told her that I wouldn’t even be able to pay our translators at those rates, let alone make enough profit to run a business.

If this other vendor was offering internal review by a second translator (what some vendors call editing or checking), then the rates that it’s paying its translators are abysmal.

I did some quick math, figuring that the vendor could pay its translators no more than $0.05 per word.

If I’m right, then a translator working full time—8 hours a day, 5 days a week, 52 weeks a year—would gross $26,000 annually. This, for someone with 10 years of experience and a master’s degree?

low translation rates equal no money in the wallet

Every freelancer’s nightmare, seen here in leather form.

That number assumes a daily output of 2,000 words. (While it’s true that some translators are faster than this, I don’t know any translator who never takes a day of vacation…)

Could we have won the bid? Sure, by charging half of what we normally charge.

But where would that leave me, the business owner? I’d be paying my team more than we’d bring in, which is a recipe for a failing business.

When It Comes to Translation Rates, Don’t Compare Apples to Oranges

As a public service to clients, I’m giving the following advice:

Never compare apples to oranges when choosing a translation vendor.

In other words, making a decision based on price doesn’t work if the services offered are different.

So clients should ask their vendor what level of service they are providing.

Is it translation only? Or is editing included? What about proofreading or desktop publishing (DTP)?

You can properly compare the bids from Vendor X and Vendor Y only if they are offering the same level of service.

apple and orange comparison of translation rates

Sure, they’re both fruits, and they’re more or less round. But they’re not identical.

When RedLine quotes on a project, we price it based on the fact that two translators work on every document: one translator translates the full document and the second reviews the work of the first.

Other vendors, however, quote on projects based on translation only—that is, only one translator ever works on the document.

The service levels are not the same, so they shouldn’t cost the same.

But for the client who thinks that the services of Vendors X and Y are identical, the lower price usually wins.

The Commodification of a Professional Service

So how did we get here?

To put it simply, translation is becoming a commodity.

I don’t think that most clients view translation as a professional service in the same way that they view legal counsel or medical advice as a professional service.

Instead, they see a translated document as a product—and not a sexy product like an iPhone, either. It’s a commodity, like corn or petroleum.

There are a few reasons for this.

corn and wheat show translation as a commodity, which affects translation rates

Clients increasingly see translation as a commodity, which drives prices down.

The Lure of Technology

First, machine translation, while still lacking in many ways, has convinced buyers that translating is as simple as doing math.

Just enter some words in a program like you would numbers in a calculator, add a few grammar rules (the analogue to mathematical operations), and presto! Translation complete.

The reality, of course, is that the disadvantages of tools such as Google Translate far outweigh the advantages when it comes to client-facing text.

Google Translate drives translation rates down

Machine translation is fast and free. The quality, though, can be utterly terrible.

But the genie is already out of the bottle. “Free” and “fast” are two words that most clients love, and machine translation offers both. It won’t replace human translators any time soon, but it is definitely changing the industry.

The end result is that professionals have to justify their seemingly high translation fees to an incredulous clientele.

The Knock-On Effect of No Regulation

Second, translators themselves contribute to the commodification of translation. Yes, really.

Here’s how. The translation industry is unregulated (in the U.S., at least), so anyone can call herself a translator.

Want to be a doctor? You have to take the MCAT, go to medical school, and complete a residency program.

Want to be a lawyer? Better get your law degree and pass your bar exam.

But if you want to work as a translator, all you need to do is call yourself a translator. Yep, just create a website and start trying to swindle—er, I mean, win—clients.

It’s unfortunate, but many so-called translators have no business working as translators. These individuals may speak two languages (even fluently), but they are in no way qualified to deliver professional translations in the fields of law, finance, IT, medicine, engineering, and the like.

Because there are no barriers to entry for translation vendors, some clients develop an “anybody can do it” mentality.

This is a huge driver of low translation rates.

No Quality Control on Client’s Side

Third, clients are often unable to assess quality.

If your new smartphone doesn’t turn on after you’ve brought it home, you know there’s a problem.

If your car is still making funny noises after you get back from the mechanic’s, you know that the issue hasn’t been fixed.

But how do you know when there’s a problem with your translation?

A translated text is unique in that many clients are unable to gauge whether or not it’s any good.

no quality control drives translation rates down

“OK, the congruity judgments look good, no syntax errors… Wait—these are sausages.”

I see this less with European clients, who often speak a second language well enough to recognize an amateurish translation when they see one.

But American clients—who by and large are monolingual—simply have no way to tell if the Spanish translation that they’ve received from their vendor is excellent, good, average, or poor.

The result? A lot of bad translations go unnoticed.

Clients are often unable to judge the quality of translation services.

If, however, clients could recognize a weak or useless translation from a competent or professional one, they would demand more from the bottom-feeding vendors in the industry.

In turn, the vendors who offer low translation rates with commensurate quality would have only two choices:

  1. improve service
  2. go out of business

And that second one would go a long way towards making translation prices more robust.

The High Cost of Bad Translation

Cheap translation is costly in two ways.

First, you usually get what you pay for. Low translation fees almost always correspond to low translation quality.

As a new agency owner, I once lost a bid to a competitor here in Grand Rapids. This vendor was charging 60% of what we were asking.

The kicker? The company approached me a few days later and asked if we could handle the project because they didn’t have the resources to do it. I politely (and ruefully) declined.

Second, low rates set a bad precedent. They cement the client’s expectations in place—exactly where you don’t want them to be, which is in the basement.

It will be near impossible to raise your fees to a respectable level once you low-ball a quote for Client X, so any future work with that client won’t be lucrative.

The ATA and Translation Rates

I’m a member of the American Translators Association. So are many of the translators who work with me.

I’ve been to its annual conference and I read the Chronicle, its monthly publication, cover to cover.

But the ATA represents two opposing parties: translators and translation agencies.

While there is much that these two parties have in common, they’re also sitting at opposite ends of the negotiating table when it comes to prices.

While I can’t help seeing this as a conflict of interest, the official reason that the ATA discourages members from discussing translation rates is out of a fear of anti-trust lawsuits. (Thanks to Paula Gordon for sending me this link.)

In the 1980s, the organization published price guidelines for translators and was subsequently investigated by the U.S. Federal Trade Commission.

In my opinion, though, any fears of price fixing are overblown. The idea of large-scale collusion among people who work alone (some in their pajamas!) strains credulity.

So while ATA employees and elected cannot discuss rates, individual members can.

And that’s a good thing. I think our industry needs more transparency, not less.

RedLine’s Stance on Translation Fees

I decided when I founded RedLine that I didn’t want to contribute to the commodification of translation as a service.

Over the past few years, we’ve seen that more and more clients simply want the lowest price they can find.

Clients who once happily paid a rate of $0.22 per source word in 2012 are now balking at paying the same rate five years later.

That’s right. Even “good” clients with whom we’ve worked for years are now realizing that an easy way to cut translation fees is to just accept the lowest bid, consequences be damned.

I’ve been clinging (stubbornly, perhaps) to the notion that professionals should make professional rates, but I’ll the first to admit that it has lost us bids.

Paying the rates that translators ask for might seem like bad business. After all, I could make more money if I negotiated rates (downward) with the translators I hire.

But this cheapens their work. Agreeing to translators’ rates, as long as the project budget allows it, builds goodwill, because freelancers see that I’m on their side, so to speak.

I find that honoring the price levels that freelancers have set creates a more trusting environment. In other words, it’s a collegial relationship rather than an adversarial one.

Combatting Low Translation Rates

So what’s the answer? I can think of three main things, any one of which would go a long way towards raising translation rates.

1. Client Education

Client education would be a good start, but it’s very time-consuming. I have projects to manage, quotes to prepare, and marketing to do.

Must I now add client education to that list? And what does that look like exactly?

Clients who read this article may start to view our service differently. That’s my hope, anyway.

But I’m just one agency owner with a website. My reach is limited.

So share this post with your colleagues (if you’re on the client side) or with your clients (if you’re on the vendor side).

2. Industry Regulation

Requiring every freelance translator to have a credential would help weed out the bottom feeders.

These part-time, untrained, or even unethical “translators” bring down translation prices to the detriment of the entire industry. (And don’t even get me started on scammers.)

A barrier to entry for would-be translators could come in the form of price (a license to practice), qualifications (a skills certification), or both.

As long as our industry remains a vendor free-for-all, translation fees will continue to drop.

surgeons are credentials; no credentials drives down translation rates

Imagine if surgeons didn’t have to have credentials. Would you still go under the knife?

3. Vendor Pushback

Are you a freelance translator? Then you should hold your ground when it comes to translation rates.

That’s right. A business owner who hires freelance translators just told you not to cut your fees.

Sure, you may get you a project—or even dozens—by slashing your rates. But I promise you this: you’ll be working just as hard for less money.

In addition, your clients won’t let you charge more down the road. Once you set a “discount precedent” with a particular client, it’s hard to go the other way, even for basic cost-of-living increases.

So push back when a client asks for your “best rates”—they’re trying to get a fraction of the work for free.

But why should they? If you’re offering a professional service, don’t you deserve a professional rate?

Of course, this isn’t to suggest that you suddenly double your translation rates overnight. That’s a sure way to scare off clients, especially when there’s no perceived added value.

Translator tip: Don’t raise your rates for all clients. Use a “grandfather clause” for current clients and charge your adjusted (higher) rates for new clients.

One approach is to use a “grandfather clause,” whereby all existing clients get your current rate (which, for the sake of argument, is too low). All new clients, however, pay your higher rate.

So hold your ground, dear translator. If you’re worth what you’re charging, you’ll find work. (Even if you’re not a walking dictionary.)

Are you a client or a vendor? Where do you stand on translation rates?

Tell me in the comments below, or share this post with your network. Doing so may not seem like much, but it’s important—for the reasons I’ve stated above—to get information about translation fees into the hands of buyers and sellers.

Thanks for reading.

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