The language services industry is growing at a rate of about 7.5% a year, and will hit US$9.5 billion in 2006. Who buys language services? Where do they live? How many translation buyers are out there?

We answered the first question in Finding the Elusive Translation Buyer, a study based on profiles of 177 major language service buyers collected from sales people in large and small LSPs (we found techno managers to be the biggest buyers by far). Then we tackled the location question in our report on Where the Translation Money Is in which we analyzed and depicted the industry and geographic distribution of language services across the United States (when will Missoula, MT show up on the map?).

Recently, we began updating our analysis based on data from the U.S. Business Census, the OECD, Eurostat, and material that collected in our research with buyers and suppliers. From these sources we estimate that there are approximately 1.2 million companies worldwide spending at least US$500 on translation services per year. Of course, translation buyers such as General Motors, Medtronics, and Microsoft spend much more than that.

Another question that regularly comes up is minimum fees. How much translation do you have to buy before an LSP wants your business? Conversely, how much should a company charge? Should there even be a minimum price?

These deep philosophical questions send us back to a basic business issue: what is the purpose of a minimum fee? Such minimums are common with credit-card purchases. In language services, minimum fees are meant to discourage clients from sending projects that are too small (sometimes just a few words or lines), but still require some work from the LSP (identifying the translators, calling them, sending files, getting them back, checking their quality, and forwarding the files to the client).

We have seen minimum fees in the United States range from US$15 to US$250 per language. In fact, when the late, unlamented Berlitz raised its minimum fee from US$150 to US$250 a few years ago, it expected to reduce the number of clients with small projects like driver licenses and birth certificates — so it could focus on more profitable projects. As it turned out, the volumes stayed stable, but the profits skyrocketed for that particular part of the business. At least in that part of the translation business, price does not matter. We’ll track this price elasticity and other pricing issues as we update our research on language services.