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#1
MapMedia

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Hmmm...Hopefully some folks have experience to lend here.

Scenario: I have US clients, but have recently moved to Italy from California.

Problem: While the dollar to euro conversion is near equal ~0.8:1, I am wondering how to address a potential future issue: what RATE to use. Ex: In US, I might guage my time on a project using a ballpark $60-100/hr billing rate, depending on the work. In Italy, an engineer or architect might earn 2000-3000 euros a month, something like $20/hr.

Quesion: What are some arguments to keep billing at US rates? I have no intention of low-balling on bids (i.e. using Euro billing rates).

Again, this issue has not come up, but it could. I want to know if others have actually dealt with this and how.

#2
rudy

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What's wrong with having 2 or more different rates? It happens all the time (think what people charge a small non-profit organization versus a larger corporation). I think it's perfectly fine to have two different rates for two different markets. Your clients needn't know. Set rates within reason, of course, but if the client is willing to pay it, then set the rate at that. That might be different between countries but I don't think that really matters.

#3
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The only problem I see with charging various rates would be when a potential (or existing) client asks for some previous billing information to verify that the rates you are offering him are in line with your going rate. Don't laugh because governments and large corporations will do this on occasions. (in other words you must prove that this is what you charge others, if you want to do business with them). You can have various rates, but I would suggest to be constant (e.g. as mentioned by Rudy a specific rate for non profit etc...), because if a client finds out you are using various billing rates (and sometimes they do find out) you might need to explain why.

I have no intention of low-balling on bids (i.e. using Euro billing rates).


.... when in Rome do like the Romans....
Chart

#4
Rob

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Quesion: What are some arguments to keep billing at US rates?


For US clients, b/c you can... Your US clients are willing pay it, so they must think it's a fair value for the services you provide... asuming said quality of service isn't degraded by moving to europe. charge'um....

for europeans, i'd think you'd need to price to the market to be competetive and gain business.

#5
Derek Tonn

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Chris,

You are talking about GIS work, right? I guess with the type of work we are doing (more "graphic design), we've found that our prices are actually lower than many of our European counterparts. Italy has been a bit different, but Great Britain, France, Germany, etc. have all tended to be a bit higher in average rates that us.

I think the previous comments are right on the mark. You have to price competitively within the marketplace in which you are trying to sell. That "marketplace" might be a particular industry segment, specific geographical regions, government vs. private industry, etc. Whatever the going rate is in the "marketplace" you are attempting to compete in is what you'll have to charge....unless you want to either try and be the price-leader (which I think is suicidal with all the in-flux of GIS work flooding the marketplace from India) or premium price based on quality and/or niche marketing. If the rates in your desired marketplace are low, then you'll probably have to either find a new marketplace to settle into or figure out ways of "faster/better/cheaper" to try and keep your margins with less expenditures going out the door.

Good luck! B)
Derek Tonn
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mapformation, LLC

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http://www.mapformation.com

#6
Hans van der Maarel

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Hmmm...Hopefully some folks have experience to lend here.

Scenario: I have US clients, but have recently moved to Italy from California.

Problem: While the dollar to euro conversion is near equal ~0.8:1, I am wondering how to address a potential future issue: what RATE to use. Ex: In US, I might guage my time on a project using a ballpark $60-100/hr billing rate, depending on the work. In Italy, an engineer or architect might earn 2000-3000 euros a month, something like $20/hr.

Quesion: What are some arguments to keep billing at US rates? I have no intention of low-balling on bids (i.e. using Euro billing rates).

Again, this issue has not come up, but it could. I want to know if others have actually dealt with this and how.


Think as a European... seriously...

If I bill $20 an hour, I need to realize I'll actually only be getting about ?14, plus I'll lose some on cashing a check or stuff like that.

Your best option, imho, is to bill in euro's. That means, of course, that if you bill 100 euro's now, you will get 100 euro's. If you bill in $, the actual value of what you'll be paid can fluctuate with the exchange rate. That may not seem much, but on larger projects, a difference of a few cents in the exchange rate may amount to tens or hundres of euro's difference (or: many hours extra or unpaid). Of course this only works if your client is okay with it.

Fortunately the US$ vs the Euro is pretty stable at the moment, it may go a bit up or a bit down, but it's been in the ?1 = $1.27-1.30 range for quite some time now.
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#7
MapMedia

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Ok, forget the dollar : euro thing - not critical.

The real issue is charging 'going rate', where in US I charge $65/hr (for example) for map production and in Italy $15-20/hr. A client might say, 'Hey, since your actually in Italy, isn't the going rate for cartographers a lot lower?'.

Again, not a current issue, and I am inclined to say 'take it or leave it', but am curious to hear how others in outside US/Canada have worked with US clients.

#8
Hans van der Maarel

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The real issue is charging 'going rate', where in US I charge $65/hr (for example) for map production and in Italy $15-20/hr. A client might say, 'Hey, since your actually in Italy, isn't the going rate for cartographers a lot lower?'.


Good point. So far, I've always charged what I think is a reasonable rate for both me and the client. Some clients thought it was too high, others thought it was just fine. I have to admit the majority of my work comes from within The Netherlands, and the majority of the international work I do comes from the rest of Europe.

Thanks to globalisation, there's a lot of work being offered from 'low-wages' countries such as India, Banghladesh and various Eastern European nations. Check out a place like Elance (elance.com) for example. Lots of bids there from those countries at rates that I simply can't match (I used to check it mainly for Google Maps programming jobs). I've seen people offer rates of "$10 per hour and the first project is free". There's simply no way I can win that based on price alone.

It all boils down to the point that I have a minimum reward in mind for doing a certain project and I don't want to go under that (in reality it isn't as black/white as I put it here, my history with that particular client and any possible future prospects certainly play a role as well). If the client still thinks it's too high, then so be it. I've got enough other projects to work on at the moment.
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#9
Jean-Louis

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Since Sept 11th . it has become increasingly difficult for me to cash American Cheques. Canadian banks (mine anyways) are now asking 25 days to clear them. My friend just went through a hassle requiring 6 WEEKS to clear an American Dollar cheque from the UAE. His banker told him that American Security is geting so cumbursome that they are suggesting to their clients to convert foreign accounts from US Dollars to Euros. This sounds very strange to me. Has any one else been experiencing such changes with US dollar accounts?
Jean-Louis Rheault
Montreal


#10
MapMedia

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Thanks all - I am sticking with US rates for US clients and Euro rates for Euro clients. Come what may.
My bank here has no problem depositing US checks, with a tiny fee of course.

#11
Martin Gamache

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Since Sept 11th . it has become increasingly difficult for me to cash American Cheques. Canadian banks (mine anyways) are now asking 25 days to clear them. My friend just went through a hassle requiring 6 WEEKS to clear an American Dollar cheque from the UAE. His banker told him that American Security is geting so cumbursome that they are suggesting to their clients to convert foreign accounts from US Dollars to Euros. This sounds very strange to me. Has any one else been experiencing such changes with US dollar accounts?



I just moved back to Canada after several years in the US and still have numerous US clients. I experienced a 6 week wait for a check written from my own US based account when I first opened my Canadian account with RBC. I now use wire transfers and bill the cost into my quotes or get payments deposited into my US accounts. The problem is with the Canadian banks themselves, not only the US regulations. None of my US banks require more than the regualr time period to cash my Canadian cheques.

The Canadian banking system is antiquated and robs its cients blind with its excessive user fees and charges.

mg

#12
Hans van der Maarel

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The Canadian banking system is antiquated and robs its cients blind with its excessive user fees and charges.


Martin, it's not just the Canadians... Having a Dutch bank account is now actually costing me money. No interest on a normal account, only a little bit on a savings account. Once you've deposited money, you can only get it out through a PIN card (which costs money), Electronic banking (which costs money) or transfer forms (you guessed it, they cost money). The funny thing is that banks here keep reporting record profits and keep on buying other, foreign banks... :blink:
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#13
Martin Gamache

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The funny thing is that banks here keep reporting record profits and keep on buying other, foreign banks... :blink:


Same here at least as far as record profits are concerned.




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