Pricing your work is tricky. Whether you're a commercial photographer, portrait shooter, or selling prints of your artwork, your career depends on your ability to price yourself well. Does your rate sheet have any of these mistakes?
First, what is good pricing? A great pricing system is a win-win scenario for photographer and client where both sides end up pleased with the value they've received in exchange for the value they've given. In an inequitable exchange, either the client or photographer walks away feeling taken advantage of, and neither scenario promotes longevity for the photographer. This leads me to pitfall number one.
Pricing Too Low
Knowing your numbers is essential to knowing how to price your work. As I've met with photographers over the past 10 years, I'm shocked at how many low-volume shooters are happy to sell their work (session and digital images included) for $100. In my win-win scenario, they're leaving that exchange happy because they haven't sat down and crunched the numbers for what it takes to be successful in business.
The baseline amount varies around the world, but if a photographer in the United States is selling one client a day — a lofty goal for a newcomer, in my opinion — on their $100 package, they're grossing just $26,000/year in revenue. After expenses and taxes, that's essentially working for free, or at least very near the poverty line. If you want some great insight into how much those expenses are, check out Danette Chappell's recent article — you might be surprised.
However, that's not the only problem with setting your rates too low. One thing I learned early on (by making a similar mistake), was that good clients won't take you seriously if you're priced unsustainably low. It's not dissimilar to a 99 cent sushi special. Probably best to avoid that, and avoid being seen as that kind of brand. I know the argument goes around that "nobody will hire me if I raise my prices," and even if I agreed with that mentality, who wants to keep working for nothing? In a pricing talk I gave recently, I equated this kind of pricing to lingchi, or death by a thousand cuts. It's a slow and torturous way to kill your business if, even at your busiest, you're priced too low to be profitable.
Having Too Many Options
Conventional wisdom tells us that consumers want choices, and if you've walked down the snack aisle in a grocery store, it would seem to confirm that idea. In photography, however, presenting someone with 31 flavors can be daunting and confusing. The oft-quoted adage, "a confused mind says 'no,'" is resoundingly accurate in our profession. As the creative professional, clients come to you because you know best, and that extends into your product offerings.
If you're selling fine art prints, you don't need to offer every size from 4x6 inches to 40x60 inches; you need to sell sizes that best represent the image you're selling. Would you be disappointed if someone put an 11x14-inch print of a sweeping landscape on their wall? I would! Don't offer it. As a portrait photographer, offering a dozen packages with varying amounts of various print sizes is overwhelming from a client standpoint. Instead, choose the products you'd most like your clients to have and base packages around that, even if you still maintain an a la carte list with a few more options. Make your pricing easily digestible and not confusing, and your clients will be more confident, and therefore more content, with their purchases.
Pricing Without a Plan
Running a photography business is just that: running a business. Your pricing cannot be a product of emotional attachment or how you feel clients will react. You also need to know your bottom out points as well as the caps you've placed on your potential sales. Your price sheet is a means to an end, and ought to be created as such.
What this means is that you need to know how much you need to earn per client to reach your target income, and then set your prices accordingly. If you've crunched the numbers and determined that you need to earn $800 per client to stay afloat, you're not going to get there selling 4x6-inch prints for $5. Instead, you need to craft your offerings so your clients are purchasing at least that amount, with the option to spend significantly more. I've talked with a lot of photographers who want to be in the six-figure club, but whose own pricing makes it impossible for them to do so.
It's much easier to be confident in your prices when you know what you need to survive. And, hey, if it doesn't work out, it's better to fail on the road to success than to spend years on the slow road to inevitable failure. Remember, you can't do your clients any good if your own prices put you out of business. Price fairly for both yourself and your clients and you can enjoy your career for as long as you'd like.
Lead image by TeroVesalainen via Pixabay.
It depends on what's in that "$100" package. Some photographers have different packages for people with different budgets (including me). Nothing wrong with a $100 package, as long as you're not shooting a wedding or anything for that.
I would ask if you've done a Cost Of Doing Business calculator. There is something wrong with a $100 package if your business isn't set up to meet the minimum per job. If you are doing volume and average 60 jobs per year with an average of 500 units (packages in this case) per job at an average of $35 dollars after Cost Of Goods/ Services and before CODB. Your 1,050,000 would be a business most likely running in the black if your CODB is 30% or less. If you are selling 365 packages or a single job every day before running any COGS/ CODB, you are at 36,500. Now your overhead and taxes will usually take 60 to 70 percent of that total. At a little more than $10,000 you are under the poverty line.
Reginald - if you’re making a living as a low- to medium-volume photographer with $100 packages, I’d be interested in interviewing you and talking through your business model. Would you be open to that?
Shooting portraits, the only time a $100 package would not cost me money would be in a special high-volume spurt, such as a limited "mini-session" special (15-minute appointments during, say, one afternoon, one pose, my choice of final images, minimal post, et cetera). That would be, essentially, cut-down service and product for such a cut-rate price. But that's not something that's sustainable full-time because that kind of volume is not practical full-time.
Good points to ponder. I'm priced on the high end in my market and always fighting the "run and gun" photogs who undercut me. But, through providing better images and exceptional customer service I am holding my own and gradually increasing my business. I find a lot of the "run and gun" people burn out in just a few years.
Great article and great points. I refuse to work in the low end. Not only is it a waste of time (after expenses and taxes) but I've learned over the years that often the clients with the smallest budgets are the most difficult. Plus, when you offer low prices, it's incredibly difficult to raise those prices later. So you'll be broke forever. All that said, I've offered the following advice to many entrepreneurs: ask for and charge based on what you wish you'd earn each year. The formula is: GOAL GROSS SALARY divided by 1000 equals YOUR GOAL HOURLY RATE. Bill your projects based on how much time you'll put into it. So, why/how the formula? Let's say you want to make $200,000/year. There are 50 weeks per year and 40 work hours per week. That's 2000 hours per year. If you're smart, you'll work HALF TIME and relax / spend time with your family / volunteer the other half. So... $200,000/1000=$200 per hour (including meetings, commutes, setup, on-site, post, etc). If you think that sounds ridiculous then you're never going to earn your goal salary... And/Or you're working too much. Someone will say to themselves, "My quality isn't good enough to charge that." Okay, fine. Study, practice and get better.
I just moved on to Cape Cod from living at military bases the last 8 years... I've had to price myself so low as the competition is so fierce around bases from mom's with cameras that now I can finally charge above $150 for sessions here with the insanely high price of income and vacationers... so nice getting bookings for three, four times as much.
"I had to price myself so low." You chose that, you could choose to compete on quality instead of price (which is more sustainable longterm). If those mom's are competition, it becomes about sales skills not photos.
The trick of dealing with military clients is setting your mind on the fact that most of them can't be your customers. We're providing a luxury service, and most servicepeople are not inclined to luxuries, except at upper level. There will, of course, be some exceptions, but generally it's the small percentage of senior people--the top five percent-- a photographer must cater to.