Mark up on pay rates when working via an agency

Hello everybody!

I just discovered by accident that the specialized private language agency I work for on a freelance basis is pulling in a 75-80% overhead; in other words, I make 25-20% of what they charge the clients, no benefits, pre-tax. Is this normal? I have some (unpaid) overhead of my own; their office tends to be unorganized, and their materials are pretty bad. I'm very good at what I do, and they give me all the clients I want. I like the company and their rather prestigious clients, but I wonder whether I'm being used. And if so, am I being used any worse than is normal for this industry in Germany?

Is it unreasonable to think I could set up my own tiny consultancy without spending most of my time trying to reel in clients? I have a few private clients already, and they pay double and in some cases triple what I make through the agency, but they tend to be short-term assignments that fall into my lap. I wouldn't know how to actively go about finding more of these clients. Does anyone have any advice, or has anyone gone through a similar situation here?

Agencies always have a markup for profit just as you expect to make money through your fee. In addition they will have overheads relating to the finding,, negotiation of and management of individual client projects.

even for freelancers thats a pretty high mark up/down.

if youre as good as you think you are (no offense intended), go to them and negotiate your own private rate. a 45/55% split wouldnt be inconcievable. make sure you dont let any other freelancers know about this, and ensure the company that this will stay between you and them.

if theyre concerned about the quality of their service and you are one person they can rely on to consistantly provide top grade work, they should make it worth your while to prioritise them as a customer.

heh...i was just thinking of a joke i saw ages ago.

a guys been working in a factory for a year and he goes to the manager and asks for a 50% pay rise. the manager says no.
guy comes back the next day and asks for a 75% increase. manager looks at him sideways and says "why the hell do you think ill say yes to that?!"

"because if you dont give me a 75% pay rise, ill tell everyone else on the factory floor that i got a 100% pay rise"...

its not really funny, but it can work...

Thanks for the replies. Bell, sure, the agency has to make a profit, and it's clear that they also have work to do to. But is 80% really normal? They are charging the clients for my expert services, after all, and most of their clients are corporate; they do one big contract at a time and win dozens of clients at once. But once that's accomplished, they're done and I step in.

Thanks for the advice, Berny. I agree, it's high. I'll have think about how best to approach them.

Stick around long enough to collect a large list of clients. Once you have enough make your move...
Contact these clients (Or have a friend front for you), and tell them that you'll do the work for XXXX
amount less than their current agency.

In the end you get more $ for your work, and the clients saves money by not going to that agency.

@berny...saw something similar to your joke playing out in real for once...a dumb manager in a printing company that I worked for during a summer let some salary info 'slip' to show that some people who figured as 'achievers' did not get as high hikes as was rumored...well, unfortunately he left some absolute base salary details on and there was lotta shit from people who got lower salaries...the guy eventually had to quit

TBH I don't know how it works for translation agencies. Their costs allö tend to be so high we do our own translations in house instead. Certainly, it is a much higher markup that we would charge to clients when using freelancers for straightforward writing projects.

I think the OP is a language teacher.