Now That I Have a Nice Photography Portfolio, How Much Should I Charge?

Although you read it on a website related to photography and videography, the information in this article can be applied to many other businesses. What I'm going to share is based on my own experience, not based on marketing books. I will not teach you new psychology tricks on how to sell mediocre products or services, nor will I give you X steps to follow blindly in order to have a successful business. I will try to give you advice to help you correctly estimate your business value and set a price accordingly.

First of all, if you want to have a successful business, you have to be good at your craft. Period. If you struggle to sell products and services that are of low quality, better read an article on improving your professional skills. This article is for those who know their craft but struggle at the point of evaluating and pricing their work. This text can be considered part three of the series I started with one of my first articles where I talked about building a dream portfolio.

The Misconception

A common way of thinking is that in our modern times, we have to apply modern rules to our businesses. There is tons of advice on the web trying to convince you that you need business psychology lessons, a business degree, knowledge in economics formulas, or other special business skills. The reality is much simpler. If you want to do business, you should know the marketing principles that have been around for centuries. In the past, people of less knowledge and degrees were able to sell their products and services successfully, even to noble and high-ranking people. That's why I prefer to talk about the old school way of managing a business.

Imagine a humble pianist who has his own business of composing music and selling it on the market. He decides to work for short films and commercials providing printed sheet music or composing music scores exclusively for a client. He has a good portfolio but struggles with what price he should put on his services, sheet music, and audio files.

The Distributor Mentality

The distributors don't produce goods. They just sell products that are already tagged with a certain price. There may be other distributors that sell similar or exactly the same products. They should always monitor the prices on the market. If people see the same product in several stores, they will choose the cheapest one. The distributors can only sell their items if the price is low or they are smart enough to sell it in a different way, like repackaging it with other goods or services. They are always at the mercy of the manufacturer. They can't fall below a certain price point, and if the item's producer raises the cost, they should raise their own prices too.

Lots of manufacturers have the same mentality. They produce the same items just like everyone else and compete on price level. They always struggle with price because there's always someone who beats them with a lower cost. Many times, such manufacturers go out of business because they don't offer anything different than the competition.

If the manufacturer sells an item for $10, the distributor can't sell it for $8. They won't have any profit. If they sell it for $11, they may fail too because $1 is not enough to cover their expenses. Being a distributor or a manufacturer with distributor mentality is always a risky business.

The Manufacturer Mentality

As someone who produces music, the composer is dependent on other manufacturers for the tools and materials he uses in his business. He calculates the price of the tools he uses, considering they may wear out or break after some time. The cost of printing is something else to consider together with price of instruments, studio, mixers, headphones, monitors, cables, software, etc. This is the operating cost. The composer also needs food, clothing, a home, transportation, communication, electricity, etc. This is his cost of living. All these are costs that are known and easy to consider for the final price. The next question is: How much should he charge above that base price?

What Are You Trying to Sell?

Is the composer selling music similar to everyone else's? Yes? Then he has to go with the distributor mentality. He has to go around the market and see how much others charge for the same service and goods and set the same price or something close to that number. Walking regularly through the market and monitoring the price of the competitors is a must. He has to try to sell to as many people as possible; otherwise, he'll go out of business. It's all about the number of clients selling the same goods over and over again.

Many manufacturers who go in this direction accuse others of lowering their prices. They are scared of low-priced competitors. They do not delight in their craftsmanship because there's nothing special about it. It's just about selling the same thing as others do.

The Boutique Mentality

The pianist decides to provide music that is masterfully composed, matching a required mood, sounding great on all kinds of speakers, and pleasing the client with his professional attitude. Now, his price may differ from everyone else's.

Most people think boutique products and services should always be more expensive than the commodity ones. In fact, they do not have to be. There are plenty of examples of products and services in smaller, poorer areas that are of high quality and at a normal price. If this price covers the cost of living, operating cost, and provides profit for the manufacturer, there's nothing wrong with being lower than the producers of commodities. The latter may cost more because they are greedy, who knows.

What about the higher price tags? Nothing wrong there either. A manufacturer can put a high price on their products and services. The clients will judge if this price is worth paying.

The boutique mentality is in the uniqueness of products and services. It's not about the cost. A craftsman of boutique products has the freedom to ask for whatever price they want, because craftsmanship, especially of a great level, can't be measured.

How High Is Too High?

Asking for more money is a challenge both for the buyer and for the seller. Let's assume the composer sets a very high price on his products. If nobody buys them, that's good. He can lower the prices. The problem is when he already had a few buyers and quickly after that lowered the prices. The buyers may see that change and feel cheated. This is not good for the reputation of the composer. The best he can do is to give those buyers a compensation and continue to sell goods at lower prices. This way, both old and new buyers will be glad about their purchases. It is wise for the musician to start low and then raise his prices gradually.

When to Raise Prices?

Prices should be raised if there's a logical demand for that. There may be a need of current or future resources (money, instruments, personal items, better life, etc.), rise of cost of living, operating cost, or simply greed. Raising prices should be gradual. No matter if the composer builds a bigger studio or hires a new sound engineer, the clients do not care about that. They want to get their goods at a price they are comfortable to pay. However, there are cases when the price may rise considerably, and that's okay. In order to justify that, the artist needs to provide products and services of higher value. The client finds it normal to have a better product at a higher cost.

Conclusion

Did you get the similarity between a musician, a photographer, and a videographer? They are all craftsmen who run their own business. If an art person wants to have delight in their art, they have to provide something unique so they can freely set a price they want. Starting low is always better and raising prices is best accompanied with better products and services. It's not normal for artists to think like distributors. They sell skills, not commodities. Skills can't be measured. Forget the competition based on price. Compete with your skills.

Look at the car manufacturers. Does Porsche struggle from lack of clients for having expensive cars? Why do people say nothing bad about an $500,000 Porsche, but (may) say $500,000 is ridiculously high for a Ford Fiesta?

When you are providing high quality products and services, you'll naturally stop worrying about the price and about your competitors. They have their own vision and prices. You are selling your skills, not a commodity everyone else may have. You can improve your skills independently from the other professionals. So should be your prices, independent from theirs.