Is There Such Thing as a 'Discount' in Photography and Filmmaking?

Is There Such Thing as a 'Discount' in Photography and Filmmaking?

The discount in the retail industry is a very common, if not vital, technique applied by all businesses, big and small. But is the discount applicable and economically sound in the world of photography and filmmaking?

Economics 101

The discount in the manufacturing and trading businesses is lowering the price within a certain pricing margin. This margin is the difference between the price you sell an item and the price you obtain it, either by producing it or by purchasing it from a manufacturer or a distributor.

If you are in the retail industry you usually purchase an item, let's say a camera, and sell it at a higher price. The amount you spend on the camera is what the distributor gives you as a price tag. The distributor usually sells you the camera at a price higher than they spent obtaining it from another dealer or the manufacturer. The latter has calculated the price of the device based on the cost of labor, materials, research and development, licensing, patents, etc. When you have a tangible item to sell, it's much easier to calculate the price for the end buyer, because you already know the amount you can't fall below — the amount you've purchased it for. This gives you one end of the pricing margin. It's up to you to define the other.

Finance trader

Justified Discount

In the big industries automation of production cuts labor costs and increases profit. The production of items becomes cheaper as their number grows, and at the same time manufacturers can lower the retail price enough, so the end buyer is happy, and yet, the manufacturer may have a bigger profit than before. Automation is a key to increasing the price margin and gives the ability of making discounts that are yet profitable. Automation is most useful when the number of produced and sold item increases.

Price Margin for Photographers and Filmmakers

In photography and filmmaking things are not that definitive. If you merely sell digital files, being just ones and zeroes, the price should be the same for everyone. You sell skills, usage rights, your time, and so on. Abilities and craftsmanship are subjective terms and they can be priced arbitrarily. Those that practice photography and filmmaking as a business know, that there is a number called "cost of doing business," which you don't go below if you want to make any profit. Everything above that is that arbitrary number we can also call a price margin. One of the expenses you can measure is the time you put into a job. This is a valuable asset that you can't get back and should be carefully spent and evaluated apart from craftsmanship. To me, the price margin for photographers and filmmakers should be somewhere above the the cost of doing business plus the time spent on a job. Also, in my opinion, it should not be a big margin.

Are Discounts Mandatory?

While people in the retail business are used to giving discounts, does that make this practice mandatory for all businesses? Imagine you make human-size sculptures and it takes you three days to make one and it costs, let's say, $3,000 to the buyer. What would be your discount if someone asks you to make 10 sculptures? Most of you will think the retail way and will say a number like $27,000. This means one is given for free. What is the price margin of a sculptor? Is there any automation that can save them time to build 10 instead of one? Will they build 10 for less than 30 days? No. If it will take them a proportional amount of days, what is then their price margin?

That is a difficult question. I can ask the same one for those who do detailed retouch on images without using one-click filters. Will retouching of 10 images be proportionally slower than retouching 50? No. It will not take you less time if you retouch more images, because it's all manual work and it takes virtually the same time for every single image. Then, why would you be tempted to give a discount on a greater number of retouched files if the client asks for it?

Charities Versus Shady Charities

You've heard stories of people doing charity, but somehow they get profit out of that. Doesn't sound good, does it? If you are a photographer or a filmmaker who works at prices that are below your cost of doing business and the time you spend on the job, this means you either haven't calculated your cost well (many people don't include the amortization of their gear or the rental of their gear from themselves) or you are working for a charity campaign. If you work for a charity campaign and yet you make profit, this may not look quite right to some people. In my opinion, if you work cheap, better work for free. Otherwise, to me it looks like a shady charity campaign or someone who doesn't know anything about business.

Shady gas station

Eyebrow-Raising Discounts

Every time I see a business slashing their price so loosely, I think they are either shamelessly overcharging their clients or are incredibly stupid to make no profit of otherwise commercial deals. Imagine you see an offer for an ARRI Alexa Mini for $1,000. Big discount or a shady deal? Remember this next time you decide to make huge discounts. What is your price margin? What is your cost of doing business? Are you registering a loss when working at discounted prices? Are you a "shady charity?"

TV obsession

When Would I Make a Discount

This is my personal opinion. I would make a discount if I am able to make a profit in some other way now or in the future, like making valuable connections, saying "thank you" to a client who helped you work on your dream projects, working with someone multiple times on interesting projects. This is the way I think of an discount in photography and filmmaking, not just lowering your price to bring attention to yourself. If it's the price that will make people look at you, you should consider switching to the retail industry and stop being an artist.

Final Thoughts

I think discounts should be applied mostly to retail businesses that sell tangible (even if it's software) items. I don't think discounts are very applicable for craftsmen unless they have ways to automate parts of their workflows and can deliver products that are still satisfactory to their clients. If you don't have such methods, better don't do discounts, because this will seem you are simply overcharging the other time. When working way cheaper than your regular price, this means you're undervaluing your work, not to mention what former clients of yours would feel when they hear that someone got the same service for much less. If your prices are impossibly high, the market will tell you that and you can adjust them accordingly. However, I'm talking about fairly-priced businesses.

Do you do discounts in your business, when, and why?

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Robert K Baggs's picture

I do offer discounts on larger jobs some of the time, but not because it would take me less time. You're absolutely right, it takes the same amount of time and effort, but if I'm not fully booked, the discount is offset by not having to canvas to fill open slots with jobs. I do also offer discounts for repeat clients too as it's not only easier to work with somebody you've already completed a job for, but less trial and error and back and forth means I save time. It's definitely tricky territory though!

Just me's picture

Also, with one job for 10 days compare to 10 one day jobs; you have a large difference on time spend on invoicing/chasing money

Jason Flynn's picture

Discounts are useful to upsell or sell additional items to a customer who’s already decided on a lesser purchase. If they think the maximum they want to spend is X, offering a discount on additional items or services may work to get them to spend more. The risk is that you might have been able to sell them the additional stuff for full price anyways just by asking.

Tihomir Lazarov's picture

If "lesser purchase" means less money for less service time and items, that's fine with me. But if a discount means to merely lower your price for the same service others paid the full price of, that's not fair neither for your business, nor for the clients who already paid the full price.

Kirk Darling's picture

I have no problem with finding a way for a client to purchase less for less. That is the theory behind "mini-sessions" that some retail portrait photographers do on limited occasions. That is the only way I would offer a "discount"--by providing lesser service at lesser price than my normal range of services and prices...and even that would be only because for some reason I felt moved to do it for that particular client.

Billy Walker's picture

An important note to people who want to discount: You MUST build a retail price with enough margin contained within that price so that you remain profitable after the discount is given. And, Yes, price markups should be part of any retail strategy.

Billy Walker's picture

First quote: "However, I'm talking about fairly-priced businesses".

Who determines what "...fairly-priced businesses" are? As I read your story, and you have some good points, I saw statements that weren't your typical line of thought here under the American commerce system. I don't know how Bulgarians are brought up but, for the most part, there is no such thing as "fairly-priced". Give 10 different people a COGS number and in all likelihood you'll end up with 7 or 8 different retail numbers.

Ultimately, the marketplace determines what is "fair", not the seller.

2nd quote: "When you have a tangible item to sell, it's much easier to calculate the price for the end buyer, because you already know the amount you can't fall below"

To a degree but ultimately not true. If no one will buy your product, guess what it's worth? Zero. COS/COGS typically has no bearing on value if no one will buy it to begin with.

On the other hand, if an item sells like hotcakes you may be able to obtain a far higher margin than you anticipated.

Even a non-tangible item can produce a COS number, therefore price the retail at a margin you feel is appropriate.

3rd quote: "To me, the price margin for photographers and filmmakers should be somewhere above the the cost of doing business plus the time spent on a job. Also, in my opinion, it should not be a big margin."

You're certainly entitled to your opinion but opinions of the producer can be meaningless in the marketplace. Having said that, who determines what a "big margin" is? The producer or the marketplace?

4th quote: "If you work for a charity campaign and yet you make profit, this may not look quite right to some people."

Where did you arrive at this conclusion? If a charity is making nothing, are you saying you should automatically make nothing? You're speaking of 2 different entities. Just because one is willing to be a charity does not imply the other feels the same.

I have a good friend who is Turkish; born and raised in Turkey; came to America where he felt everyone was overcharging. He has very strange thoughts on how commerce works.

Proof in the pudding? Even communist countries have black markets. Proof that the marketplace will ultimately determine value and not the seller and/or producer and/or a government.

Hopefully this provides food for thought... free of charge no less :-)

Tihomir Lazarov's picture

Fairly-priced is indeed a term that is driven by the market and that's has nothing to do with the whole market, but with the niche of customers for that particular brand. For example Benley is fairly priced for the wealthy folk. To me it's ridiculously overpriced, because I'm not of that market niche.

When talking about fair price I mean the price-to-final product ratio. When the resulting images or videos look high-end I would expect an expensive photographer or a filmmaker. Otherwise, a high price tag would look ridiculous and thus it won't be fair-priced.

Let's take the iPhone for an example. Who decided the price tag? The market or the seller? Who introduced the product? The market demanded for that product or it was something new? Who keeps selling that device at a high price and still succeeds? What drives the sales: the demand of the market for a lower price or the seller? In all those cases it's the seller, because of the way the product is positioned. If you try to sell mineral water, then you really need to listen to the market, because you're selling a commodity. If you make something unique, you are in a better position to dictate the price.

Although I am in Bulgaria, I've lived in the US as well and I'm pretty much familiar with the financial system, buyers' mindset, the psychology of marketing, and so foth. Here it's not that different, but I don't like to conform to a system that drives businesses to work the same way. In the case of the current article, applying a discount in the retail business and in the art business is something completely different. In the case of the latter many times it sounds like "I can change my price however I want, because I don't really have an idea how to calculate my prices. I just want to overcharge you."

About your 2nd quote: I'm talking about calculating a price margin, not about the ability to market and sell an item. If nobody needs such an item it's not the price to blame, but the business niche you've chosen. If nobody buys an item it doesn't mean right away it's expensive. It may not be targeted to the right audience, nobody knows about it, or its presentation is not good enough to make a client want it.

About the 3rd quote: As I said above, it's not just the price, but the product as well. If you hire Michael Bay to make an ad for canned beans, it will cost you a lot and your complaint "it's too expensive" will be laughed at, because you as a "market" are not the right market for that producer or director. On the other hand if someone named Michael Bay pitches you that he will shoot your ad for $150, you will know it's a scam. Price always comes with the product and the server. Otherwise it's just a "same as others" commodity that has to have a price comparable to the other similar commodities, although there are companies that sell commodities quite well, because of their witty marketing.

About the 4th quote: I'm very careful when using words. Charity by definition is "a gift for public benevolent purposes" or "generosity and helpfulness especially toward the needy or suffering." That doesn't sound like "making profit" to me. The fact "charities" today are the so called "non-profit organizations," that are actually making profit, because people work there, doesn't change the original meaning of the word. I was talking about its original meaning, not about profitable businesses that sometimes give money for certain causes, but first and foremost it's their profit, otherwise they won't exist.

Billy Walker's picture

I'm not sure what you're saying in your reply. Perhaps it's because we've been brought up under different commerce systems?

Your Bentley example is not valid. You are correct when discussing different price strategies. But your overpriced comment has nothing to do with your particular market niche. What might be correct to say is you cannot afford the Bentley. I cannot afford a Bentley either. However, that does not mean the car is overpriced. The word overpriced really implies higher than "normal" profit margins; whatever "normal" might mean.

If COGS on a Bentley is $236,000 and MSRP is $295,000 is that overpriced? Most automobiles have approximate Gross Profit margins of 11% up to 17%. My Gross Profit number in this example results in a 20% Gross Profit margin. In my mind that margin is easily something in the ballpark given the exclusive nature of a Bentley. There would be no way you could call the car "overpriced". By the way, I am not familiar with Bentley price markups.

Now, if MSRP is $472,000 does that mean the car is overpriced? Your line of thinking would seem to imply Yes it is overpriced. But that's not the whole story...

If Bentley sells every car they build that fact alone implies the car is not overpriced at that price point. Why? Because the given marketplace where a Bentley lives has determined the car is worth that price. It also means the two of us will struggle even harder to buy a Bentley. Being unaffordable has nothing to do with something being overpriced. It simply means we cannot afford the product.

To do this a bit differently: Bentley discovers it cannot find any buyers, even at the COGS number. However, it seems to sell units at a $175,000 MSRP. That fact alone is now proof positive the original MSRP was overpriced. Despite the COGS number.

In a free marketplace, the marketplace itself, no matter what strata it may be focused on, will ultimately determine if something is overpriced. Tangible value is related more to COGS than anything else; in the end the marketplace will determine if you're price strategy is correct or not. Whether you or I can afford the purchase doesn't necessarily have anything to do with an item being overpriced.

If I produce an image with a total COS value of $100, and I can sell it for $1,500 often enough to stay in business, that image is not overpriced. This is another proof positive. Enough people in the marketplace agreed with the $1.5k valuation that it allowed me to stay in business.

By the way, my Turkish friend disagrees with everything said here. He is of the opinion that everything basically has a pre-defined value. In his opinion a free marketplace, with what he deems "overpriced" items, means you're getting ripped off. Ultimately, at the end of the day, black markets around the world become proof positive that prove him to be wrong.

Tihomir Lazarov's picture

Actually, I never said "overpriced" meant "something you could not afford." You gave the correct definition of "overpriced" and that is something priced way higher than the COGS. Of course "way higher" is subjective and can't be evaluated enough if there weren't any competitors. Usually an overpriced item can live in a niche with little or no competitors which can be a particular business niche or a situation with a small town with 150 citizens and only one extremely expensive car service shop in the vicinity of 150 miles.

Billy Walker's picture

I think we may be having an issue with what certain words mean. I am in agreement: you never said overpriced meant something you could not afford. And, I never gave you the overpriced definition you think I did.

You are missing the nuances involved in my comments. My wife is from Chile and came to the U.S. when she was 21 years old. Having been together for twenty years now, I am frequently reminded of the nuances she doesn't pick-up on, both in print, and in conversation. Your commentary to my comments are not tying in with what I have written.

You have missed the point entirely in my Bentley example. The example states Bentley has a car with a COGS value of $236,000. That is the tangible value of the car. However, the MARKETPLACE determined it was not even worth that as they couldn't find buyers until it had an MSRP of $175,000. Bentley could not hit sales numbers in its chosen strata and no one was willing to value the car even at COGS value. Therefore, the marketplace has spoken, not Bentley.

By the way, you may want to research the accounting rules behind a non-profit such as a charity. Like many, people are not aware of what constitutes "non-profit" and what it needs to do in order to qualify under that status. Your comment about people being employed at a charity have nothing to do with their non-profit status. The fact that you missed my point about a photographer, i.e. the 2nd entity, needing to work free of charge is an example of missing a nuance.

Please do not take my comments here as being negative towards you. Having lived in South Florida for many years and working with a large Latino population on a daily basis, both as customers and employees, and being married to a Latina, I am more than well aware of the mistakes made in reading and comprehension. I applaud your efforts for trying to get your point of view across actually.

I hereby give up with my explanations. My Turkish friend has the same issue with my explanations. I think this is more a byproduct of being brought up in 2 different commerce systems possibly. And, the understanding of the nuances in conversation and/or print. I really don't know.

Thank you for your responses.

Benoit Pigeon's picture

I offer no discount, mostly because I am looking for repeat accounts who are interested in investing in a service that is extremely reliable. If you discount and the client starts having less to shoot on a yearly basis, then you lose. What I do however is meet, talk about the needs and evaluate what best pricing route to take so it is fair for both side and I don't shoot myself into under charging. It can be hourly plus all the image work or per shot. For some clients per shot is the best route as they know before hand what I'm going to cost and they can budget for it for the year or quarter. I may not always charge for everything in the case of a repeat client that brings a very big job. They should be able to notice it in the bill rather than me writing down 15% or what ever off. What happen is that the client keeps some of his budget money but because they don't know, accounting does not start asking for permanent discounts.

Marcus Joyce's picture

$15,000 for a wedding shoot. But if you sign up right now I'll do it for $3499. Limited spaces available at this incredible rate.

Deleted Account's picture

Just spat out my discounted 2 for the price of 1 pre-new year champagne when I read this. 😁

Just me's picture

"if you pay the deposit right now"...

Deleted Account's picture

Never offered a discount. Never been asked to. I don’t live in a society where it’s expected. You make a price offer. Done with it. Why on earth why I offer a discount?
Take it or leave it.

Jason Flynn's picture

Walmart seems to have done okay with the business model of high volume at a discount. If you’re not working every hour you’re available and making more money than you know how to spend, there’s probably room for improvement in your marketing and price is part of marketing.

Deleted Account's picture

I don’t shop at Walmart. I don’t live in the US.
I don’t need to work every hour of every day to be happy. Different priorities. Better life.

Tihomir Lazarov's picture

I agree with Rob Mitchell. Discounts at Walmart are because they are making a profit at the same time. They don't make discounts just because they like to give gifts to the customers. They just lower their price margin.

In art discounts have to be tied with the service and products people receive. Less price for lesser service. Otherwise it looks like your prices can shift arbitrarily and you don't really have a firm idea how much you are worth.

Jason Flynn's picture

Walmart is definitely not making a profit all the time. For example, DVDs in the bargain bin for $2 each cost them more to buy many years ago but $2 is all they can sell them for now. That’s a discount, and profit has nothing to do with the correct pricing strategy.

Kirk Darling's picture

I don't know where Walmart got the DVDs in their bargain bin. You're presuming those are leftovers from original sales on Walmart shelves...but maybe not. I've seen titles in their bargain bin that I'm sure was never on regular sale--titles far too obscure for that. I suspect Walmart buys lots of low-value DVDs for pennies and is still selling them at a profit.

Tihomir Lazarov's picture

Yes, there are times that items' clearance is not made for profit, but overall the company has made profit from other items which cover that loss. But what Kirk says is also true.

Billy Walker's picture

Tihomir Lazarov Sir, profit has everything to do with a pricing strategy. Strategies are not guaranteed. They consist of your plans to either increase your sales, your exposure and/or your profits. Amongst others. But EVERYTHING that revolves around the business world is ultimately designed to increase profits. Without profits or, profits without enough margin to stay in business, you get the honor of going out of business.

Ivan Lantsov's picture

foolishnes charity pay rent not work for free

Kirk Darling's picture

It doesn't appear that "price margin" and "profit" mean the same thing around the world.

In my Business 101, my cost of doing business includes my salary--the money that gets transferred to my personal bank account. What's left in the business bank account after subtracting all costs of doing business (including my salary) is the business "profit." If I had shareholders, that would be their dividend. I don't have shareholders, so that is an amount for business expansion.

Not that many photographers run a business with any "profit" left after paying themselves the same wage they'd expect to be paid by an employer for the same number of hours of skilled work.

Billy Walker's picture

Hi Kirk, actually a "dividend" is paid from profit, and does not imply profit is a dividend. A company is typically never going to distribute all of their profit as they would give away any and all "cushion".

It appears the writer of the story doesn't understand the actual meaning of "overpriced" and who determines what is overpriced. You can sell anything you want, for any price you want, and as long as there are enough customers willing to pay your price, AND you stay in business, the product is not "overpriced". And, the market place is in agreement with that by agreeing to give your company their money.

There is nothing on Planet Earth that automatically has a retail value. The value becomes real by people who are willing, or not willing, to give you their money. It's really as simple as that.

sam dasso's picture

Absolutely. Sony A7rIV or Sony A9II are incredible cameras with enormous amount of engineering and manufacturing advances, But market value of these cameras are less than Chanel handbag. If you have a name recognition you could sell 19 cents banana taped to the wall with duct tape for $120000. If you are photographer regardless how much you think about your craftsmanship - your fair value is your name recognition and salesmanship talent. With modern cameras 12 year old can do what you do. Face it - there is no discount on your work or fair value. It is your marketing skills that determine a price you can get for pushing the shutter button.

Tihomir Lazarov's picture

Yes, you are right. I personally use an old camera exactly because of the fact the market will pay you regardless of the age of your gear as long as you can do work clients pay for.

Billy Walker's picture

Perhaps sad to say but it is a fact that discounts have importance in modern life. That is exactly where price strategy comes into play. For those that feel discounts can play an important role you MUST use a markup strategy that allows for discounts while still enabling strong profits. When done well you have built a win-win strategy. The customer is getting a discount and you are maintaining gross margin. This is not our fault... customers fool themselves every day of the week in thinking that everything should be discounted before they themselves make a purchase. You as a business cannot fix that mindset. So create a markup strategy designed to please both the consumer and you.

IMPORTANT REMINDER: You, Mr. or Mrs. or Ms. Photographer literally manufacture a custom product using your camera. Notice those words "... custom product...". Is that not the truth? You are not readily comparable. Most consumers will not see the value in this. However, if you wish to remain in business it is your responsibility to find consumers who do value what you do. And, it is your job as a photographer, to educate the customer as to why you should be the source of their purchase.

Whether your product is good or bad is NOT necessarily the point; what counts is you have found enough people who like what you do in order to stay in business. Most consumers cannot really tell the difference between excellent and good. They like you, therefore they like your product.

You are not a photographer... you are mostly a full time marketer looking for people who are interested in buying what you sell. That in a nutshell is the crux of the matter.

Tihomir Lazarov's picture

Yes, dividend is paid from profit and I don't see Kirk stating the contrary. What was probably not clear was that receiving a dividend does not necessarily mean withdrawing all the company profits you have, although you can do that (being the sole shareholder).

About the "overpriced" explanation: Yes, we're discussing that above.

About the "automatic retail value:" Your statement is true if you were the manufacturer. If you were the dealer you automatically have a minimum value for the price range. That's what I meant in the article.

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