Sunday, April 24, 2022

The myth of market price in translation


[best price*]

The issue of ideal pricing is of great interest to all business people, including freelance translators. For the latter, many seek the market price as it were the holy grail (and bewail those that "break" it. In one sense, it is similar to that holy object: it does not exist (no offense to those of religious faith). While in economic theory, supply and demand intersect over time to determine the proper price, the conditions for that convergence do not exist in the freelance translation business due to the lack of information by both the purchaser and provider. This darkness leaves the players to follow Candide’s advice: il faut cultiver son jardin [you must cultivate your own garden].

In order to understand the mechanics of the freelance marketplace, I will first describe two markets where supply and demand do affect pricing directly. The first is a retail purchase of a standard physical product. A consumer wishing to purchase a Black and Decker 4-volt electric screwdriver at an attractive price can check the advertised price in local stores and compares them to prices available from online outlets, taking into account transportation and shipping costs, as applicable. Within a short period of time, the careful consumer has a clear picture of how much the item should cost. On the other side of the fence, the retailers also have full access to the price of their competitors, both physical and online, and are fully aware of their inventory and when it was purchased. If a given store finds itself with excess inventory that is not moving, it generally can announce a sale and clear it out for more profitable items. This action in practice changes the price situation and affects consumer behavior. Thus, both sellers and buyers can identify an ideal price or at least such a range.

The interaction involved in providing a service, such as a lube and oil shop, can also create a market price. Car owners can easily check listed price for this car maintenance service. Taking into account physical distance and perceived quality of service, they can identify the best deal and have their car serviced. A garage owner, seeing a drop in the number of service calls and significant downtime by its employees, can choose to lower its price for such a service and thus increase its volume, or alternatively raise the price if the volume or price comparison indicates that its rate is too low. Again, each side of the transaction exerts constant pressure on the price level.

Freelance purchasers do not enjoy such transparency or knowledge. A translation agency may have created a list of freelance translators and their rates but elements of this year may be and quite often are quite outdated. They are certainly not shared with other translation agencies. In practice, only when an agency is required to recruit additional service providers does it discover that rates have decreased or increased. Furthermore, only experience can determine whether the translation quality is sufficient for their purposes. End customers such as consumers or non-translation companies generally have no or very little knowledge of translation rates and must base their decision on a very small sample, possibly 3 quotes, or a discussion with a few colleagues on their experience. It is essentially impossible to do a market survey as most agencies do not nor cannot post the actual cost on their sites, but only ranges, while the fast majority of translators either choose not to or may not post rates. Since the translation business is Internet based and thus unaffected by physical geography, a local survey is irrelevant to the issue. Thus, purchasers of translation are obliged to make a poorly educated guess of rates.

On the other side of the coin, freelance translators are completely in the dark. They simply do not know what purchasers are paying or competitors are charging. The only proof of successful pricing is the confirmation of an order but that notice does not indicate whether their bid was very high or very low nor how much other bidders offered, if relevant. In many countries, including Israel, it is illegal for service providers to discuss prices as such an act is considered “price fixing”.  Even if legal, most freelancer are loath to openly discuss their rates out of fear that theirs are way out of line or of losing business to a colleague. Since translators live throughout the world, standards of living vary extremely, often rendering any such comparison irrelevant. In practice, freelance translators work in the dark not only in terms of typing away in isolation in their homes but also in terms of almost no awareness of market price, previous and current. In such conditions, it is impossible for them to influence the market price as they are unaware of both supply and demand.

As we do not live in ideal world, as Voltaire reminded us in Candide, freelancers essentially decide the best policy for themselves given their place of residence, choice of life style and financial situation. They choose rates based on the income they expect and need to earn, not what is actually possible. Thus, Chinese and Indian translators can earn sufficient income from 0.04 USD a word while European and North American ones find that impractical. Purchasers of translation do not generally survey rates, meaning that the quality of the service is the most important factor over the long term as long as the rate is in line with their budget. Of course, agency conglomeration and machine translation affect the industry but these are long- term dynamics with a very long tail. Freelance translators define their own market.

This chaotic pricing situation is not negative in itself. It provides freelancers with freedom of choice and the ability to create niches to survive, even thrive. However, any talk of “market price” for a translation product has no or very little meaning. As my father would say, the value of an item is what a person is willing to pay for it. The best option for translators to find customers that are willing to pay more for it.

* Captions are a vital tool for the blind in accessing the Internet.

Picture credit: Image by <a href=";utm_medium=referral&amp;utm_campaign=image&amp;utm_content=374404">Gerd Altmann</a> from <a href=";utm_medium=referral&amp;utm_campaign=image&amp;utm_content=374404">Pixabay</a>


  1. Excellent article! You were able to express what I have been trying to tell my students for years. I will steer them to your article. Thank you for being so practical. This is what translators and interpreters need to understand.

    1. If it helps others avoid mistakes, I am very happy.

  2. Brilliant article, I agree completely.