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Archive 2012 · Anyone use this pricing strategy?
  
 
mrhoni
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p.1 #1 · p.1 #1 · Anyone use this pricing strategy?


I wonder if any of you successfully use this strategy or something similar.

Set standard price for type of shoot based upon the average sum of all time involved. You have determined you want to gross $50/hour and you will spend 10 hours for everything involved. You tell the customer the price is $500 and they can have prints at cost or all the digital files (only the finals, not everything you shot).

From a customer perspective they don't see you charging $40 for an 8x10 print, but they might hesitate at a high "session fee". From my perspective, I am getting paid for all my time and expense.

An option could be prints and files not at cost but still at a price that gives you some additional profit but is reasonable to the customer.

Thoughts?





Nov 23, 2012 at 05:55 PM
RDKirk
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p.1 #2 · p.1 #2 · Anyone use this pricing strategy?


Set standard price for type of shoot based upon the average sum of all time involved. You have determined you want to gross $50/hour and you will spend 10 hours for everything involved. You tell the customer the price is $500 and they can have prints at cost or all the digital files (only the finals, not everything you shot).

Well, any pricing method must include the average sum of all time involved as one of the cost of sales factors.

(The $50 per hour gross is what I have to put in my personal checking account. Being self-employed, I have a lot more expenses than a salaried employee would have, so $50 gross per hour would work out more like $20 per hour for a salaried employee.)

Don't forget the other costs of sales, though (gasoline, for instance) and don't forget the portion of your annual overhead that each sale must bear. If your overhead is $12,000 annually and you expect 200 clients per year, you have to add $60 to each job (but that overhead figure I tossed out is 'way low for a studio owner and that number of clients per year is 'way high for a new photographer). Remember that you won't have 40 billable hours per week--you won't fill 40 hours per week with sessions.

So it can't just be $500, it will have to be something substantially more than that. Depending on your overhead, if you're full-time professional with a studio it would probably be triple that amount. If you're a part-time professional with less overhead, perhaps only 75% or double.



Nov 24, 2012 at 12:36 AM
mrhoni
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p.1 #3 · p.1 #3 · Anyone use this pricing strategy?


The $50/hr is just an example. I'm really interested in knowing if you price for the service and have the prints and files at cost or a small markup, do customers like this pricing strategy and are photograpers successful with it.


Nov 24, 2012 at 12:55 AM
myam203
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p.1 #4 · p.1 #4 · Anyone use this pricing strategy?


I've been doing this sort of thing with my family portrait sessions. They aren't my main source of income, so I don't charge very much, but I currently do 1-hour sessions with a disc of the best images for $250 (~25 images, high res and web size). I shoot on location, using natural light and spend almost no time in post, so I feel okay about that price. I'd like to start charging $500+, but I think that would be difficult to do without including prints or even a framed piece (at least where I live). People love having shots for Facebook nowadays, but there's a point where they're spending so much that they need to receive a physical product in order to justify the cost to themselves.

I plan on raising my prices soon, but in order to do that, I feel that I should start hiring an assistant, using lighting to raise the production value of my work, and including prints and a framed piece. That way, no one can argue that I'm charging too much when I ask for $500 or more.



Nov 24, 2012 at 01:01 AM
RDKirk
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p.1 #5 · p.1 #5 · Anyone use this pricing strategy?


mrhoni wrote:
The $50/hr is just an example. I'm really interested in knowing if you price for the service and have the prints and files at cost or a small markup, do customers like this pricing strategy and are photograpers successful with it.


I was just rolling with the $50 figure because you used it--the number doesn't really matter. Plug in whatever figure you want. Just understand that labor is only one of the cost factors, and that a self-employed person needs a lot more per hour than an employee.

If your question is simply whether customers prefer to pay a large fixed price and little or no further money as they choose actual products, there are some photographers who do work that way.

It's par for the course in commercial work. A growing number are being able to do weddings in that manner.

In my experience, it doesn't work very well with portraiture. As Mike mentioned, when you begin charging professional-level fees (i.e., living wage-level money) people still expect to get significant tangible product when you're talking about portraits. If all they want are Facebook pictures, they won't pay for 10 hours labor. In fact, I simply could not do a "Facebook picture only" job at a profitable level that anyone would pay enough for.



Nov 24, 2012 at 02:55 PM
jefferies1
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p.1 #6 · p.1 #6 · Anyone use this pricing strategy?


The issue I see is the average consumer does not start out wanting to spent $500.00 on a photo shoot. They want nice images but think that means $500.00 for an hours work. They don't consider post processing time. Most sales are made due to emotion after the client views an amazing set of images. Now the idea of $500.00 per hour does not enter the picture, only that they want that photo and will pay for it.This could be $500.00 or $2000.00. This is how studios can charge nothing up front but end up with $1200.00-$3000.00 for the session. Asking a lot upfront is a much harder sell.
Your system is more a business package pricing.
Commercial work which I do mostly is more of a fixed price with no upselling. I have to prove upfront I can do the job and back it up with a good portfoio etc.
They don't want to see $100.00 session fee and then add on for everything else. They want a firm $1500.00 or whatever amount for XYZ and delivered as in the agreement.Usually all must be approved in advance so changes are not good. Emotion does not enter into it like with family images.

Exception is business portraits done for individuals. No corporate office involved. They might like different looks and want extra images which is an upsell.



Nov 26, 2012 at 06:15 PM
BFahey
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p.1 #7 · p.1 #7 · Anyone use this pricing strategy?


We typically charge $100/hr for shooting time and $50/hr for everything else. I.e. post processing, sales time, travel, etc. Everything is job costed into our price. We NEVER include images or files for free.

I am struggling right now with a commercial client who wants image files and copyrights included in our hourly fee and they don't seem to understand the concept of licensing. The problem I have is that its not their fault. The photogs they worked with in the past have set this ridiculous precedent and now we have to live with it.

Please don't make our industry a race to the bottom.



Nov 26, 2012 at 08:22 PM
Steve-Adoria
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p.1 #8 · p.1 #8 · Anyone use this pricing strategy?


My wife is relatively new to pro photography - just clocked up one year now.
Her pricing is based on selling a package for a fixed price that is low enough to be payed in full up front ($AU 199 to $AU 250) which includes credit towards photo or image purchase.
image purchase prices have a moderate margin to cover the average pp costs, print costs and fixed annual costs with a moderate profit.
In the new year the cost per print may rise a little to cover extra value items like having a lighting assistant etc.

So far her goal of earning a modest income while expanding her portfolio and client base seems to be working.
Regards,
Steve - Adoria photography



Dec 04, 2012 at 07:55 PM
Lee Saxon
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p.1 #9 · p.1 #9 · Anyone use this pricing strategy?


I've done the flat rate thing shooting college football. I get a flat $400 up front to shoot a game, then I hand the athletic department a CD of full size images that are theirs to do with as they wish. Then I'm done. No arguing with anyone over $60 prints.

NCAA doesn't allow selling of players' images anyway, so no licensing complications. If I was expecting shared rights, I might charge a bit less. I'd never ask for licensing, way too much hassle. Maybe in some alternate reality where people are ethical and honest.



Dec 17, 2012 at 09:12 AM
 

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jrs5fg
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p.1 #10 · p.1 #10 · Anyone use this pricing strategy?


I am struggling right now with a commercial client who wants image files and copyrights included in our hourly fee and they don't seem to understand the concept of licensing. The problem I have is that its not their fault. The photogs they worked with in the past have set this ridiculous precedent and now we have to live with it.

Please don't make our industry a race to the bottom.


Well as a college student semi-self-employed photographer who knows arts students, it's seems sort of suspect to not offer your clients full rights (that is, joint rights) when you're just starting out.



Dec 24, 2012 at 10:06 AM
BenV
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p.1 #11 · p.1 #11 · Anyone use this pricing strategy?


jrs5fg wrote:
Well as a college student semi-self-employed photographer who knows arts students, it's seems sort of suspect to not offer your clients full rights (that is, joint rights) when you're just starting out.


why?



Dec 25, 2012 at 12:29 AM
markd61
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p.1 #12 · p.1 #12 · Anyone use this pricing strategy?


Some good comments and observations here:
First, my points are about someone wishing to make a living from photography. If you are a hobbyist, your prices can be pulled from a hat for all I care.
If you want to make money on the side and like being regarded as a part-time pro these points also apply as your pricing will reflect upon you to your customers.
Jeffries correctly points out that portraiture is a selling proposition. The appeal for many IS the prospect of upselling to a $1500 canvas print. There is no upper bound on sales.
Choosing a flat pricing structure means that your selling price is your maximum revenue for the job.

I shoot both portraiture and commercial jobs so I do have different strategies for each.
I DO get clients who ask me for all the images with usage rights but I will explain the difference between the pricing structures of buying prints and getting the files (much more expensive).
Remember, the client is asking for the files because he/she thinks they are going to save a ton because "you didn't have to do any work".
Work has nothing to do with it. This is a PROFESSIONAL field where a professional delivers what the layperson cannot. An attorney may spend five minutes on a task but bill you $1500 because you can't do it. That is the whole point of hiring a pro.
Additionally as RDKirk points out, overhead has to be paid for someone who is conducting a business. Overhead is not accrued when you get a client but is ongoing whether you have clients/sales or not.

Trying to plan a pricing strategy so the client gets to pay less is a plan for failure.

Small business is about large margins. If you think you can prosper by charging the least that you can "to get the traffic" you will only attract the clients who will flee at the next price increase or when the next coupon comes in from Groupon.
Most people earn average incomes and are focused on price. You do not want them as clients. Portraiture is a luxury good and needs to be sold as such. Selling for " a bit over cost" is a gift to your friend (they aren't clients 'cause clients make money for you) because you are losing money.

Learn to sell. Most all of us dislike the prospect of selling as it seems like we are being pushy or insincere. If you cannot come to grips with that you cannot choose a line of work that requires you to sell.

Commercial photography has a lot of appeal as there is less "selling" but one still has to convince a client that the half day fee for photography plus expenses is worth it because of the great product they will be getting. Moreover one has to do this with very large quotes all year long.

Guess what? many people who call me think I charge too much!
That is as it should be because I am looking for the client who understands the value of my work and is not choosing me because they are going to save themselves $500. THEIR job may be on the line if they cut corners with the photography or design or media or manufacture. If that is the case they will pay for the best but they will also demand the best.

For jrs5fg: When you are starting out you can always charge less, give away files , whatever. This is great experience. BUT.... I would recommend learning as much about the business end of it as possible because that will make the difference between having a future or not. Adopting losing strategies because they seem good to you or because you are embarrassed about charging for your work means that as you gain experience you will be burdened by cr@p clients that will drive crazy and keep you busy with little revenue and no prospect for price increases.
Fewer clients for more money is always the better mix as you can give better service and take the time to amaze them. This is what pays off.



Dec 25, 2012 at 12:34 AM
RDKirk
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p.1 #13 · p.1 #13 · Anyone use this pricing strategy?


jrs5fg wrote:
Well as a college student semi-self-employed photographer who knows arts students, it's seems sort of suspect to not offer your clients full rights (that is, joint rights) when you're just starting out.


What does "just starting out" have to do with it? Why would it seem suspect that someone "just starting out" would want to retain his copyright? Should Tom Clancy have given up the copyright to "Hunt for Red October" because he was "just starting out?" Was it "suspect" that he didn't?



Dec 25, 2012 at 04:22 AM
RDKirk
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p.1 #14 · p.1 #14 · Anyone use this pricing strategy?


Learn to sell. Most all of us dislike the prospect of selling as it seems like we are being pushy or insincere. If you cannot come to grips with that you cannot choose a line of work that requires you to sell.

Learning to sell is very much easier if you actually believe in what you do. This is a problem I find in these forums when talking about pricing and selling.


Some people are natural salesmen. They love selling. They can sell anything. Nothing evil about that--selling makes the world go 'round.

I find that I'm not a natural salesman. But when I really believe that what I'm offering will truly enrich someone's life, then I have no problem "selling" it, whether it's a great book or movie I'm excited about...or great portraits.

I have no problem "selling" my clients on buying a wall portrait instead of new drapes. I have no problem being willing to convince them to throw away that picture on their wall of someone they don't know or some place they've never been in favor of the portrait I've made of their loved ones. That's because I myself an utterly convinced that my work will make their lives better...and for longer than a new big-screen television or a new sofa. That television will be trash in five or ten years. My portraits will cause smiles for decades and are worth handing down for generations.

I have no problem "selling" that.



Dec 25, 2012 at 04:31 AM
jrs5fg
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p.1 #15 · p.1 #15 · Anyone use this pricing strategy?


What does "just starting out" have to do with it? Why would it seem suspect that someone "just starting out" would want to retain his copyright? Should Tom Clancy have given up the copyright to "Hunt for Red October" because he was "just starting out?" Was it "suspect" that he didn't?

Well, it seems kind of arrogant to not share rights to something clients commission if you are not well-known or well-established.



Dec 25, 2012 at 11:15 AM
Jamesbjenkins
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p.1 #16 · p.1 #16 · Anyone use this pricing strategy?


jrs5fg wrote:
Well, it seems kind of arrogant to not share rights to something clients commission if you are not well-known or well-established.


Rookie mistake there. It's called having a good business plan and sticking to it. "Arrogance" is completely irrelevant.



Dec 25, 2012 at 01:37 PM
RDKirk
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p.1 #17 · p.1 #17 · Anyone use this pricing strategy?


Well, it seems kind of arrogant to not share rights to something clients commission if you are not well-known or well-established.

I think you believe that only because we're talking about photographs. I'll go back to literature. Let's say I send a publisher a synopsis of my very first novel and "pitch" an idea. The publisher thinks it's a good idea and tells me to write it. I write it, the publisher likes it and sends me an advance payment. The novel becomes a best seller and then a movie produce asks for film rights. The movie is a blockbuster.

Why would it have been arrogant for me to have retained my copyright and only licensed the publisher for proper first publication rights, the movie producer for film rights, et cetera?

"Just starting out" is irrelevant. What matters is the artistic and technical perfection of the product. If my product--just starting out--is worth money, then I'm rightfully due all the money it's worth.

Look at Joey Lawrence, for instance, who was "just starting out" only a few years ago. The kid (and I'm old enough and experienced enough to call him a "kid") was freaking incredible right out of the starting block as a teenager--he was commissioned for the movie "Twilight" posters when he was only eighteen.

His work "just starting out" was easily worth ten times more than the average experienced professional. I hope like heck he held on to all his copyrights.



Dec 25, 2012 at 03:20 PM
markd61
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p.1 #18 · p.1 #18 · Anyone use this pricing strategy?


RDKirk wrote:
I find that I'm not a natural salesman. But when I really believe that what I'm offering will truly enrich someone's life, then I have no problem "selling" it, whether it's a great book or movie I'm excited about...or great portraits.


That is exactly correct. If you do not believe in the excellence and value of what you do, communicating the value to the client is impossible.
Some people have more fear than others even when they believe in themselves.



Dec 25, 2012 at 06:10 PM





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