Translation clients and the reverse auction

In an auction, buyers compete to offer the highest buying price; in a reverse auction, sellers compete to offer the lowest selling price.

Reverse auctions are one of the ways that big corporations cut their expenses down to the bone. They know that everybody wants a "big" client, and they take advantage of this fact ruthlessly.

A friend of mine runs a translation agency, and his biggest client — a manufacturer that's a household name in Japan — uses reverse auctions.

This manufacturer has a list of translation companies that have passed its translation test, and not screwed up on any jobs for it in the past. Then when it has a translation job, it sends requests for quotes to all the agencies on its list. The agency that responds with the lowest quote within one hour gets the job.

Not to set myself up as a paragon of quality translation, but I don't work for my friend's agency because the pay is too low. Nevertheless, my friend seems to be happy with the quality of translators he has; his problem is that he can't find enough translators to fill the huge volume of work he gets (wonder why…).

The core problem with this setup is that manufacturing companies try to apply manufacturing practices to things like translation, which are decidedly not like manufacturing (for one thing, there is no "economy of scale" with translation). Generally, the most egregious demands for volume discounts I've received have been for work from manufacturers.

But if you're looking for translations of passable, but not great quality, and you want to pay the absolute lowest price possible, then a reverse auction is a good bet.

5 comments to Translation clients and the reverse auction

  • Our company regularly bids on projects. In recent cycles there have been lots of new (to the translation field, anyway; printing houses and the like) companies that place bids around 30–50% of ours. No idea how on earth they can offer the translation, editing, layout, and printing these projects require at those prices.

    It’s sad for the people in the ministries that actually do the work on these projects. They would prefer to work with a company like ours, which knows the stuff and can respond to their demands appropriately, but the bean-counters call the shots. Even when they state up front that a track record in the field and actual ability to do the translation will count in the selection process, it’s always the lowest price that takes the job.

  • “No idea how on earth they can offer the translation, editing, layout, and printing these projects require at those prices. ”

    An agency I used to do work for jumped on the economic crisis bandwagon by unilaterally announcing that all translation rates would be cut in half. I no longer translate for them, but they recently asked me to evaluate some trial translations, and “native check” the best three. The pay was good, and I was curious about the quality of their translators at those rates, so I agreed.

    Then I understood why those translators were settling for half the market rate.

  • Competitive bidding is not exactly new, although a one-hour cycle sounds pretty brutal. And rate-chiseling in general is hardly new. I recall vividly a job from one of my best clients who asked me to accept a rate cut after I had started the job—this was more than ten years ago.

  • This is, of course, a very sad development. Couldn’t agree with you more, Ryan. One doesn’t need to have an MBA in operations to understand that with translation there are no economies of scale, hence you can’t produce the 1,000th word (or widget) cheaper than the first one. It’s a service, not a product. Interesting insight about the translations you helped evaluate, Ryan. The only solution, if there is one, is for us professionals to start working together and to stop undercutting each other by accepting lower rates, which makes this reverse bidding system work in the first place. I’m all for us being Entpreneurial Linguists and following the lawyer example: sure, some of them compete on price, but in general it’s understood that you don’t get a capable attorney for peanuts. Same is true in our profession. If you pay peanuts, most of the time, you get….

  • Totally agree with Ryan’s and Judy’s comments. Especially with Judy’s “call to arms” to linguists to stop trying to undercut each other. Just a couple of days ago a colleague at LinkedIn made a comment about seeing a quote from a peer for us.d 0.02!!!!! per source word. I myself saw this kind of rate from another so-called translator of my local community. This, besides evidencing a total lack of self-respect, is a very harmful and destructive practice. If we, as linguist professionals, were to put up a united front, even big business would find it hard to apply their price-cutting tactics. If you treat yourself as a door-mat, you will surely be tread upon…..

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