Negotiating Vs. Haggling Vs. The Payment Policy

Greetings and Salutations dear readers,

I wanted to tap into the minds and experience of the VoiceOver collective and ask a question that sometimes bothers me. Is it just me or has working in the voice over industry sometimes made you feel like you are a fishmonger in the local market.

Whether its during a communication between a client or an agent proxy I find that sometimes the haggling can get tiresome and somewhere along the line I decided to get very very stubborn.

I am sure that the Global financial crisis (a gift from the last US president as far as I am concerned) has caused some serious financial belt tightening. The ripple effect from this crisis has devastated thousands of companies and has caused the laying off of possibly millions of people worldwide.

The Net 30 Incident

The concept of Net 30 is pretty simple:

Net 30 is a form of trade credit which specifies that the net amount (the total outstanding on the invoice) is expected to be payment received in full 30 days after the Goods are dispatched by the seller, or 30 days after the Service is completed.

I was introduced to the term a year or so back when I decided to develop my voiceover business from a national to an International endeavor. Before that my only experience with delayed payment is when I worked with several freelancing companies in Toronto (design related) and the policy was that they paid you biweekly as long as you faxed in your time-sheet before end of day Friday. Of course in my regular job we get our salaries at the end of the month and that can also be considered net 30 except that its a fixed position and not a freelance job.

The very first international client I worked for was extremely nice and I give them much credit for encouraging me to take further steps toward establishing my VO business online and go global. They were also the first firm to introduce me to net 30.

In all honesty I hated the concept. I much preferred the envelope of cash that one gets after a successful studio recording with production companies locally. The ability to take the cash out and immediately put it in your pocket … tax free and instantaneous… is really quite gratifying.

As my network of International clients grew… so did my exposure to different payment policies. Needless to say my favorite was the instant payment via Paypal… although the transaction deduction really ticked me off … at least until I started adding a markup specifically for clients who wanted to pay me via paypal.

Post Financial Apocalypse

One specific client was by far my favorite… because they sent me the most jobs and always paid me the fastest. They always had the highest priority and I would often go above and beyond the call of duty to keep them happy.

But then the crisis hit… and one day I got an email telling me of their revised method of payment. Now instead of instant payment… my choices where Net 60 or go fish.

So I get paid 60 days after the fact. Pretty freaking ridiculous. Their justification was that their clients where paying them late so they would be paying me late. In anycase… the jobs from them decreased and it wasn’t much of an issue since my other clients still had a more reasonable payment policy.

The reason I bring it up is that increasingly now… more and more clients are using the global financial crisis as a reason to pay me late. The translator I work with also told me that many of her clients from Europe are starting to change their payment policy to that effect.

If you ask me… That’s just Bull Crap.

Zen and the Art of  Haggling.

I’ve never been much of a haggler. I basically go to a shop… look at their prices… if they have something I like I make note of the model … and go around to similar shops and find the best price deal. But I never go up to the salesperson and tell him that I would buy their product if they gave me a 5, 10 or 15% discount.

My first real brush with haggling was during my Hajj pilgrimage to Mecca… before the Hajj started… I went there a few weeks prior to the Hajj and basically lived in Mecca for a week or so. During that week I observed on several occasions some of the other Pilgrims (I can’t really say that without hearing John Wayne in the back of my mind saying it) haggling and successfully bringing down the price of some product in the bazaar on the outskirts of the Holy Sites there.

Within a week I was a pro… and by the time I went back to egypt… I was a master. In Egypt … where men generally don’t haggle… I was able to do it on several occasions and leave the salesperson dazed with wonder at what just happened.

Of course when a client decides to contact me directly for a voice over job and treats my voice as a commodity (which technically it is) that he can get anywhere else… I used to worry about losing the job to someone else… and end up hating myself for doing a time consuming job for next to nothing.

A year into this… and something in my head clicked. I’ve been in the VO business now close to 15 years and if they want to hire someone else to do it.

Fine.

Go Ahead.

But I’m not changing my price. After all the financial crisis has hit me just as hard as it can hit you. I’ve seen a drop in booking, I’ve seen a rise in equipment cost. I’ve seen a sudden stretch of my financial liquidity.

Of Course I am well aware that the money is as good as in the bank with the net 30, 45 and 60 policy… but still it does mean I see the return on my work a month or 2 later.

A Foundation For Negotiation.

I’ve considered dropping all those Net 60 clients. I really have. But its not practical. They are still paying customers and whether I like it or not I did agree when I did that I would accept the Net 45 or Net 60 payment policy.

But I did find a way out.

It’s quite simple. With new clients I don’t accept anything beyond net 15. In fact It seems that there is an existing work around to the whole Net 30 concept that I wasn’t aware of.

It’s something along the lines of this:

Net 30 terms are often coupled with a credit for early payment; e.g. the notation “2% 10, net 30” indicates that a 2% discount can be taken by the buyer only if payment is received in full within 10 days of the dispatch of the goods, and that full payment is expected within 30 days. For example, if “$1000 2/10 net 30” is written on a bill, the buyer can take a 2% discount ($1000 x .02 = $20) and make a payment of $980 within 10 days.

See I didn’t know that. I just accepted the financial pitfall that I fell in and sat on the edge of the proverbial lake and lamented myself.

In effect you can accept new clients with net 30 but introduce them to the concept of %15 10, net 30 and make the appropriate markup so that if they do wish to delay the payment they pay more and if they wish to pay sooner you get what you wanted in the first place.

Having said that… I still wouldn’t go for new clients with net 30 policies.

In fact I’ve started to renegotiate my fee with all the companies I used to work with to make up for an increased cost of living… and a delayed payment policy from almost everyone.

And if they don’t like it… Well then I’m sure they can go ahead and find someone else that fits their needs and that also has my skills, meets his deadlines and provides excellent customer service. It’s a simple matter of know your self worth.

Tapping into the VO Collective

This article came out a little longer than I anticipated but if you think back to the first paragraph in it you’ll remember that I wrote this article mainly to give my thoughts on the matter as well as find out what you guys think of these recent changes in payment policy and what your experiences are.

I’d greatly appreciate any and all input you have.

Salam,

Mahmoud Taji


14 Comments


  1. Taji,

    Excellent thoughts. Thank you for putting this together.

    Be well,
    Bob

  2. Hello Bob,
    Thanks for taking the time to read the article… and you’re very welcome, I hope it can be beneficial to some of the other VO talent out there.

    Taji

  3. Hey Taji

    There is a counter argument to using the economic crisis as an excuse to delay payment, and that is to insist on earlier payment as you don’t even know if they’ll still be in business next week or the week after! The last thing you want to do is take in number and stand in line for your payment should your client become insolvent.

    Seriously though, I don’t haggle much on price either, if at all. My rate is generally not negotiable… Seriously. I’ve found that most will just try it out because they have a certain perception of voiceover artists being there with their freelance, itinerant, gypsy caps in hand, desperately pleadingly in need of work. A polite but very firm, if at times awkward, ‘no’ soon puts an end to that and is also able to invert that perception. Suddenly you become something… special. Perhaps even, heaven forbid… good. A logical explanation as to how that rate was arrived at also helps.

    I’m of the belief it’s the quality of the client that matters most. Both rates and terms can be adjusted according to the relationship I have with the client, the frequency of the work and the kind of income that work generates for me. Net 30 is my standard, Net 60 seldom happens and I have generally refused work when told this is their payment policy.

    The excuse of not paying me until they get paid is unfortunately heard all too often, coming mostly from agents and production houses, but again, it’s from the perception of the voiceover needing to be grateful for having got the work in the first place. I find this stance arrogant and patronising, as they have forgotten how essential you are to their business. A little gratitude and respect would be appreciated rather than their matronly dictating the terms of how they intend to pay. Don’t forget, without you, and others like you, they’re out of business. My response generally is to make it clear that if they can’t afford to pay me they shouldn’t book me. Credit terms are for me to determine, not for them.

    Still, I will at times agree to Net 60 for certain clients if only for the reasons already mentioned — frequency of work, how well it pays, not needing to pursue payment, and how well I get along with them.

    With new clients my credit terms are the standard 30 days if they are local as it’s unwise to offer different terms to different people who may perhaps meet or know each other and have the opportunity to compare notes. I’ll insist on payment up front, usually before I step in the booth, from clients I’ve had complications with in the past, especially as regards payment.

    All online work is delivery after payment. I don’t let anything go until I’m paid first. The client has the opportunity to hear the recording by way of a watermarked audio link but that’s as far as it goes. Once it’s approved and paid for I then fire off the file.

    Oh, and I won’t be offering discounts for earlier payments. I’d be surprised if it actually works as an incentive and besides, it’s really going to mess with paperwork that I’m loathe to do, especially towards the end of the financial year.

    Cheers

    David

  4. Hey there Dave,

    Thanks for reading my article and replying with one of equal length!! I’m impressed.

    I agree with pretty much all you have said. Unfortunately since most of my clients are from all around the world … I have to work with a plethora of different payment methods.

    The thing about you Dave is that because your voice is so distinct and your accent is somewhat more in demand than your run of the mill Midwestern American… I think you can pick and choose and stipulate all you want. I don’t think most of the voice talent out there have your strengths but many of them do have strengths of their own and have marketed themselves well enough to have a strong roster of clients.

    I am kind of similar to you in that my talents are not so common that clients can lord it up on me. Add to that the fact that for some reason arabic vo talent are not as diligent as I am when it comes to quick replies on quotations and fast completion of jobs (I forget if the term is fast turnaround or turn over… its one of those… its getting late and It’s been a long day so my brain is in a semi functional state).

    Overall I think you’ve taught me quite allot from your reply and I hope others benefit from it too.

    Counter cheers,
    Taji

  5. Fantastic article! I’ve ‘fired’ clients in the last few years that I never thought I would, simply because I stepped up to finally charging my value, and they couldn’t deal with it. The clients I’ve kept (and the new ones I’ve acquired) post-economic breakdown have been some of the most meaningful jobs I’ve ever done. If we don’t respect our industry, no one will. I thank you for sharing your thoughts today!

  6. Taji,

    You make some strong points here. In my experience regarding the discounting of the total on a 30 day invoice is that once the client (or the accounting person) is given that opportunity they’ve gone ahead and taken the discount and payed me late anyway.

    Damned shame. There was a time in this country when big corporations had more concern for the “little guy” business. But those days are long gone never to return.

    Like you I’m stubborn about maintaining my worth. Pricing is hard enough to do without all the other BS we go through. I’ve lost many jobs over the years because I may not be negotiable with a new client. At least they know I’m committed to quality work.

    Ciao,
    Rick

  7. Hey Taji

    Sorry to chew your ear off. I promise not to carry on this time. Being able to type quickly makes such rants easier very likely to happen. 😉

    Everyone has strengths as a VO. Anyone who doesn’t better do something else or are just going to have to make do with peanuts (by undercutting those who have strengths).

    A buyer will always try to get the best price. Their undervaluing a VO’s product is the easiest way for them to do that by playing to insecurities and the talent’s perceived desperation.

    It’s up to the VO to not let that happen. If the VO has strengths, which they all should, then they brand themselves accordingly or, on the other hand, if they have no strengths then what they mainly have to build on is price… and by how far they can cut it down.

    As for payment methods, I also work for different parts of the world and have generally found PayPal to be universal. Frankly, I hate it as I’ve been dicked around a few times by PP (a client depositing funds then PP withdrawing them and charging ME for the trouble!), and I’ve also hit a few speed bumps and snags from time to time, as you know, but ultimately that’s more often to do with the client and their inability to make their credibility clear to PP, ie. hotmail accounts, current location a different country to home address, etc. I doubt that would be any easier with anybody else.

    I have, nevertheless, signed up to those other payment methods you had advised, like Moneybookers, but have yet to use them. And nobody’s asking for them. PayPal is still the simplest and easiest, for me at least.

    Your story is a good read and food for thought, as always, Taj.

    btw… hope this wasn’t too long. :\

    More cheers

    David

  8. One more thing…

    What truly lies at the heart of this is that most agents and production houses, and practically all clients, just can’t come to terms with the kind of money we get paid for what, to them, seems to be such little effort.

    So there is an element of jealousy and resentment as far as the agents and production houses are concerned, as they’re often putting in long hours of hard work and seriously demeaning kowtowing for what seems to be significantly less reward. As for the client, if they’re not sheepishly intimidated be the bewildering world of ‘creatives’ their response is generally one of, well, sheer disbelief!

    What’s not understood though is that our skills are not only natural-born, God-given talent but also an ability and craft honed over years, if not decades. All of that blood, sweat, tears and history wades into the voiceover booth for that 30 second recording. It has to count for something.

    A little Economics 101 soon helps explain all this — supply and demand. Ours is a highly specialised skill. But that’s applicable only to the time spent recording. What about the rest of the time? What about all those empty hours of doing… nothing? Should that be considered a free-time?

    No, it comes at a cost that’s factored into the equation. Why?
    While production people seem more than masochistically willing to work non-stop round the clock, most clients I’ve known definitely do not want to be in a recording studio at 11pm on a Friday night because the VO has a full-time Monday to Friday gig. A professional VO is a full-time career. Making yourself available, often at short notice, is also what factors into and contributes to the cost. So the client can have his job done within an hour or two and not at midnight on the weekend.

    Yet all they ever see is the easy money for little effort.

    It’s also the reason why the industry is saturated with so many non-professionals and wannabes who are just looking for an easy buck. It’s a career path not unlike actor, model, filmmaker, artist, photographer and writer. Telling people you are one, while waiting for the next welfare cheque, is all that’s required.

    Client perception of our profession is tainted by this. But when they hear a real pro they soon learn the difference.

    Okay, I know… I’m ranting again.

    Later

  9. Buddy with the amount of knowledge and know-how you are giving me right now I wish you’d leave article long comments on all my features. In fact … if you don’t mind I might ask you to write up an article of your own for The “Emporium”.

    I think I also might have accidentally offended you when I mentioned that the comment was long. You might have misconstrued that as mentioned out of irritation as opposed to it just being an observation and a nudge of encouragement. Its kind of like when I am having a conversation with someone from the west and we agree that one or the other would do something specific… and I say God Willing (in arabic inshallah if-God-Wills-it) and then the Westerner looks at me in horror like I jinxed the whole endeavor. Religiously I am obliged to say that because in actuality nothing will happen without the will of God involved. So I’m not saying… welll we’ll do whatever it is we have to do unless something bad happens… but rather… if it is preordained to happen at the time we (mere mortals) wish it to happen (in other words… the best laid plans of mice and men).

    So David… PLEASE write as much and as often as you like. I greatly appreciate it.

    Taji

  10. I know what you mean. As a ‘Creative’ Director I often get offers to freelance … but its always like… I just need you to think about this for 5 minutes and come up with an idea. Then when he gets billed for the idea… the client has a heart attack because he can’t believe an idea that came up with in 5 minutes would cost him the amount it does. It’s not just 5 minutes… it 5 minutes and 15 years of advertising know-how and experience. Plus the creative spark that he himself does not have.

    So to avoid all this… I stopped freelancing creative work. Less income… but more peace of mind.

    and honestly… I wish you’d rant more often.
    Taji

  11. Amazing article and even more great insight within all the comments. It doesn’t just apply to VO , I think it applies to all freelance jobs, the most frequent comment I get is “how come it costs that much, it will only take you 10 minutes?!”. It never does.

    I think I’m going to start being more stubborn about payments, and let’s see how that works.

    Cheers everyone.

  12. No offense taken, my friend. I’m prone to have my ideas snowball and my writing along with them just so long as my fingers keep dancing across this keyboard. I try to be concise and only wind up being obtuse or obscure. But when I ramble I can become muddled and confusing. Writing… Now that has to be one of the least respected yet most admired skills and crafts in the world. Writer’s are so often the unsung heroes of so much. Do you see right now my ideas cascading and a snowball beginning as we speak? Me too. So I’ll nip it in the bud. I’m in the middle of cleaning up a recording that’s leaving me yawning… oops, there I go again!

    cya

    D

  13. This is really a great discussion. David, you say things I’ve thought for awhile & couldn’t articulate. VO is an underrated profession, it takes a lot of skill & sometimes nerves of steel to do what we do. Not to mention constant training & studio upgrades. And it’s lonely. Yes, it is also a marvelous profession, and the magic created in a session where it’s all happening can’t be beat. But we have to value what we do. It begins with us.

  14. Great piece, Mahmoud, and between you and Dave you seem to have covered most of my own thoughts (I came late to the party!)

    For my part, I’m generally willing to give new domestic clients (those here in the UK) 30-day terms, unless I smell something odd in the discussion phase, but if they pay late then I insist on prepayment for the next job. Anyone who fails to pay after a reminder gets a letter by registered post, politely but firmly threatening action, and most people don’t want a County Court Judgement against their name or their business. Another useful reminder to clients is that the voiceover business is quite a close-knit community and that word of bad creditors gets around quickly via word-of-mouth and online forums.

    For international clients, who are harder to chase up if they were to go into arrears, I now usually insist on prepayment via PayPal, using a figure calculated to offset my losses in the PayPal fees (there’s a handy online calculator which will do this for you which I use a lot).

    Personally, I think there’s a certain amount of flexibility required: I have some large clients who pay on 30 or 45-day terms, but they pay regularly and they pay on time to their cycle – and they make up a big chunk of my regular work, so I’m not going to insist they change their cycles just for me. It’s like the clients who won’t allow you to invoice until you’ve been given a Purchase Order – larger firms often don’t seem to have the flexibility to change their procedures on-the-fly. Interestingly, though, those who use PayPal and pay using a company credit card often seem to be able to circumvent this, and I wonder if there’s a change in attitudes just around the corner.

    All the best from London!

    Mike

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