Inflation is slowly killing your business, and many photographers haven't seen the big picture yet. Inflation is an on-going process but the past couple of years have really taken a bite out of the small business success story.
Pricing Scares Photographers
Already photographers feel uncomfortable around the topic of pricing, which is why I believe many are photographing at no-cost but justifying the actions. Not only should we face that uncomfortable conversation, but we should routinely check-in and see how we are doing with the marketplace.
Is everyone raising their fees and we are stagnant? Did you only raise your fees by 2% and the average is 6%? Learn to check in with yourself and make that a habit for your business. Running a successful business means ongoing management.
How Inflation Plays Into Your Business
Inflation will always be a part of the story, we've been going through inflation every year but the past couple of years have particularly been painful. So, the United States government announced that inflation was 6.8% for 2021 and while many business analysts disagree with the figures (some say it's 10%), let's assume the government was being honest with the 6.8% inflation.
What that means is your $1,000 in the bank should be worth about $930 by the end of the same year. Leaving your money in the bank is detrimental, not raising your fees is consequential, and not facing this fear is damaging.
How Is Inflation Affecting My Income?
For easy math, let's assume that you charged $1,000 for your average photo shoot. That was your 2021 price and your 2022 price should be different, it should be higher. Because charging the same $1,000 in 2022 really gives you the buying power of about $930. That's only after one year, imagine what inflation will be by the end of 2022. The government keeps printing more money, and the money in your bank is worth less. You must adjust for that!
Let's also face reality, we're all aging. We're getting more tired and not only are you making less money each year but you are also doing it with less energy. Yes, ring the alarms! You're going to have to make a change and commit to it.
The Wealthy Are Doing It
Multi-billion dollar companies have increased their rates, even Amazon increase their rates, and I believe they are worth in the trillion-dollar range. The happiest place on earth, Disneyland, increases their prices too. The list goes on and on but photographers like you and me are slow to adapt. Why would we allow multi-billion dollar companies to do this and as multi-thousand dollar companies we are not making this adjustment?
That's the beauty of big brands going ahead of you. They have already educated the market on the need for increased pricing. You don't have to have an uncomfortable conversation with your client, not more than it really needs to be. The market has educated the market, when you raise your fees it will not be anything new. In fact, I would bet that some clients would wonder why it took you so long?
The 4 Stages of Raising Your Photography Pricing
In this video, I broke down the stages for raising your fees. Watch the video in its entirety and I hope that you recognize how easy it is to achieve profitability. Let me break down the basics of the first steps:
- REALIZATION: you have to realize that you've been underselling yourself with your photography pricing, undervaluing yourself, under-representing yourself. You have to realize that it's a slow decline downward, not up. Do you have to realize there is no trophy for being a martyr?
- DECISION: the second step would be to actually decide that you deserve better, that you want better. In order to move to our third step, you have to wholeheartedly feel step two. Are you just saying it? Or do you really feel that it is time for a change? Once you feel it you can move into step three.
- ACTION: Seek relief. In this case, the relief you were seeking is additional funding for your photography business. The other relief you are seeking is to become profitable, not a declining business. What do we need to do in order to see relief? Raise your fees? Sounds like a great plan! OK let's go to step 4...
- RELIEF: one of my favorite authors, Esther Hicks talks about seeking relief. She says she shouldn't worry about how or why something is happening, just seek relief. Do you want more money? Raise your prices, that is a relief.
As you watch the video, I will dive deeper into each stage but this is a quick preview for you. I will also answer questions like "How do I discuss this with my clients?" and "Should I increase my rate in steps or at once?"
Thanks for this article - I've been watching our finances as the cost of everything has risen noticeably and have been thinking about a rate increase, although I think my rates are at a good place currently. I've always kept my rate at a round number and done a rate increase when I felt it could handle a jump from $1,000 to $1,500, from $1,500 to $2,000, etc. This article has me thinking of abandoning that somewhat-arbitrary way of thinking about my rates and just going up a clean 10%. Thanks for that Walid Azami !
I find it interesting how photographers view inflation, how they see the chance to increase prices in an already over saturated market. You have to know your market and explore new ones. I worked in the medical field for 25 years and build house for 20 years before that, the whole time I did photography and made a lot of money doing photography. During times of inflation I lowered my prices, yes lowered my prices. I got more work and made more money if money is your goal. You have to sell yourself and your product, not charge more, that gets you nowhere. Do not buy into the, I have to have new gear, if I have the latest and greatest I'll be better, get more work, no it's not going to happen you'll just go further down the rabbit hole of debt, use what you have and know how to use what you have.
Bottom line, the market is oversaturated with wanta bees, who rely on their gear to get them through, and what happens when that magical camera doesn't work correctly? What then? Don't raise prices, lower prices, people want to get a "good deal" so sell them the good deal idea, and sell yourself as the person to give them that "Gooood Deal".
Raising prices won't get you there. I don't buy gear now and haven't for 20 years I get loaner gear from 3 different companies and they get to use the results if they want, and I get to keep the gear. It's a working relationship.
Buying gear (in the hope of raising prices because of the gear) is a completely different discussion from raising prices in reaction to inflation.
So Roger you spent 45years of your career having to work in other fields as an employee yet are giving advice how independent contractors running a photo business should bill their invoices? Not to mention horribly wrong advice.
My only disagreement with the article is that what most low ballers fail to do is be thorough enough to do a proper CODB. If prices are going up they need to redo their CODB and make sure they are actually covering all their costs. Watch as gas prices jump are we suppose to eat those new costs?
If the pandemic taught photographer's anything I hope it taught us that we need to include health care, a retirement fund, and a rainy day fund into out CODB.
Roger as an employee are you enrolled in a company's 401k? Why shouldn't photographers bill for their own retirement?
But if you lower your rates at any point, or discount for that matter, anyone who sees you doing that is going to view you as a discount- or struggling photographer, which affects how they think about your work, regardless of how good it might be. Every time I've raised rates, which has been five times over the last eight years, I've seen both a jump in revenue and in number of clients I'm working with currently.
This is counterintuitive and short-sighted advice. It has nothing to do with buying new equipment. It has everything to do with CODB increasing at every avenue. Giving a "good deal" sets your standard as a low precedent with limited long-term growth opportunities and a low-end clientele. Bad advice.
Retail photography falls into the category of a luxury purchase. Our products do not fill a need, they satisfy a desire. My competitor is Christian Louboutin. A minimum purchase from me is just about the same price as a lower-end pair of Christian Louboutin shoes. I have zero doubt the women who make up my target market are acutely aware of that fact.
This means inflation decreases the purchasing power of our potential clients just as it decreases our own. Walid mentioned the aspect of "shedding clients" a bit to flippantly for my taste, but for sure retail photographers must face the prospect of marketing to a higher income level of clients as a response to inflation...not merely raising prices in the same market.
Not really sure of your point, photography/memories have a lot more importance that some fancy shoes. I learn that decades ago assisting an extremely expensive wedding photographer on a young extremely poor couple's wedding. Fancy shoes may fit a temporary desire but having a tangible piece of memory is something of value for the life of the person. Think of that 18yr old female who today would be in her fifty's does she cherish the shoes that are no longer in her closet or the memories the photos bring back.
Sorry you are wrong to think photography is a product and you know who else thinks your wrong, the court system that's why we don't sell photography in the eyes of the court we license images or transfer copyright.
"Our product" is the fact that it is professional and high quality. Keeping the comparison with shoes in mind, we can say shoes are a necessity, but Christian Louboutin shoes are a luxury.
In the same way, "photographic memories" of a wedding may be a necessity (which is still debatable), but spending thousands of dollars on them is a luxury.
I guess the difference is, are we selling it as professional and high quality or are we selling it as an investment when down the road the value will be unmeasurable?
You say go after bigger and better clients that's great and all, but I say there is a significant number of photographers that have been under billing their services and serving people who want/need professional services, now and in the future. This is a good opportunity for photographers at all levels to reevaluate their prices and raise them accordingly.
I was responding to a correspondent who bragged about underbidding his services and scoffed at the idea of raising prices...because paying his mortgage did not depend on selling his photography. Do you think you're going to change his mind?
Do you think you're going to change the opinions of people who are happy with cell phone photos? Or other photographers who are happy to underbid or shoot for free? People who underbid aren't ignorant. They believe they are morally superior to you and me, and that we are just price gouging.
But for sure, photographers who are trying to earn a living with their photography certainly do need to understand how to price for a livable profit, and a lot of those people may be underestimating the effect of inflation on their bottom lines.
I don't disagree with the video. I merely emphasized a point that the video itself actually made: That as we consider raising prices, we should also more seriously consider marketing to a higher income bracket.
That's my point...is that what you disagree with?
One last post, because you asked questions, not trying to beat that decaying horse.
"Do you think you're going to change his mind?" Yes and no. I don't really care about him I care that we learn so much in online comments (that come up years latter in search results) so yes there are young photographers who may very well learn from these opinions. Art schools suck, they don't teach business we learn so much on our own. I learn stuff and change my mind all the time. Heck even your post has me questioning.
People are happy with cell phone pics because they haven't been "sold" (horrible word) the benefits of the other. Going back to the wedding photog - it's only someone with a professional agenda who takes the time to gather the different family groups together for group photos. Quite frankly as time passes the most important valuable images a wedding photographer can provide. Are they artistic, no could a cell phone do it yes, but it's a pro that gathers the groups.
I believe people underbid because there is so incredibly little knowledge throughout all of our school years on accounting, business practices, etc... Look at the way math is taught as if we're going to be physicists, same math problems could be reworded to emphasize business math problems but they're not.
What did I disagreed with, I guess the self-deification that photography only has the value as a product in the immediate moment. That somewhere in the future we might win some fantasy client who will pay us a fair amount. I know some shooters who have "incredible" "INCREDIBLE" clients they don't know how to bill and leave money on the table are shortchanging their health care, retirement, etc.. and have harmed the profession.
In any case, the horse is dead.
Yes I also want to thank both the author and stoppers for articles like this. We spend a large amount on both equipment/software but also on independent learning on how to master our craft yet we short change ourselves when we price assignments. So Thank you for posting these types of articles.
Says you. There's plenty of work out there if you know how to look for it and if you are dedicated to the craft.
So i am very aware of the inflation rate, and started quoting a modest price increase this year. I went from closing 2 out of 3 jobs, to not closing one out of 6 jobs.
Dropped my price back to last years prices on the last 2 quotes, still no close.
I have to start thinking that the inflation is hitting clients as well and they not only can't afford the higher rates, but may be cutting back on what they may have spent last year.
The multi-billion dollar businesses were causing inflation to start with. They wanted to recoup their imaginary Covid losses. Now the war in Europe is contributing.