Pricing photography for portrait photographers is probably the most difficult task for photographers to accomplish. Most photographers are right-brained artists and can be very emotional and attached to their work. Finding a comfort zone in pricing is perhaps their largest hurdle. I hope to educate you today on the basics of pricing in order to be profitable.
Before we go into pricing I would like to discuss value and value perception. I would hope that any photographer would not want to be competitive with a chain in pricing and services. It makes no economic sense to be competitive with a chain or a low-end studio unless you want to work high volume and earn minimum wage. You do not want clients to choose you because you are cheap. By pricing at a certain price point, you can actually add value to your product. If you start out with low prices, it is a lot harder to raise them than if you start out with higher prices.
Basically you have to ask yourself, "how much money do you need to make?" Are you working a second job in your family or is this the main source of income? I have seen many recent photographers under-price their work. It is astounding to see the low price levels that are appearing in the industry. The disparity is pricing is not only confusing to the public, it stigmatizes the industry.
Many people have instantly become photographers due to the economy. A photographer does not need any formal education or degree and just about anyone can hang out a shingle and say they are a photographer. It is important to learn the basics about cameras, business, sales and marketing before starting a business. After all, would we want to see a dentist or lawyer without credentials?
Your next step after education is to brand your work. You must always appear professional, over-deliver and offer products that cannot be found elsewhere. Be the "Coach purse" of your industry. With computer enhancements and Photoshop it is easier than ever to brand your own imagery. Brand, brand, brand can not be emphasized enough.
So how do you price your work. We'll start with a basic, single-unit 8 x 10. Let's say your lab charges . Shipping is an extra (hopefully you are using a pro-lab and ordering your photos on-line). You have spent 15 minutes retouching the image and your rate is per hour (or you have someone else do it). Add mounting and spraying the photo for an additional .50. If you charge a sitting fee you will not need to add in capture time, but if you don't you should add that also.In this scenario, let's say you do charge a sitting fee, so we won't add it in as an additional expense. So your total fees for an 8 x 10 portrait are .00. Your next step is to multiply that number by a cost of sales. The lower the percentage, the more money you make and the higher the percentage the less money you make. If you multiply .00 by 5 you have a cost of sales of 20% and a sales price of .00 but if you multiply .00 by 3 you have a cost of sales of 33% and you have a sales price of .00. It is clear that in the first example you have made .00 more than the second example. Now you would have to sell a lot of 8 x 10's to make a living so next comes the art of bundling. By offering packages you can make more money by upselling to your customers. You can offer that same 8 x 10, add in a few 5 x 7's and wallets and offer a price level that is more attractive to the client than ordering a la carte. You can play around with the numbers and see for yourself how easy it is to price your work. Industry standards for pricing are anywhere between 15 - 35% for cost of sales figures. If you want to make more money have a lower cost of sales percentage. It is that easy.
Your cost of sales figures must always include EVERY EXPENSE that goes into creating the product. Photographers who only consider the price of the print are under-pricing their product and not pricing for profit. Do not forget to include retouching (even if you do it yourself; what is your hourly rate?), shipping costs, mounting and other finishing expenses. Once you include all the expenses and calculate you cost of sales on this figure, will you be in your way to becoming a profitable business.
A basic adage is that you will sell what you show. If you show 8 x 10's you will sell 8 x 10's If you show larger wall portraits, you will most likely sell more higher priced items and you will make more money. Bundle your wall portraits with gift portraits for grandparents, albums, jewelry and you can increase your average sale significantly.
For managing your prices and budgets, I highly recommend Successware software as your studio management software. Not only will it help you with the pricing but it can also completely automate your office, and keep you on track with budgets and much more. I have been using this program since 2001 and I could not be in business without it.
I owe a lot of credit to two people who have been my mentors for years. Charles Lewis is not only a great photographer, he has taught me the sales skills to compete in the very competitive photography industry. Second, Ann Monteith, Marketing Guru, built a business program at the Professional Photographers of America from the ground up. They are both amazing and I highly
recommend you to subscribe to their blogs and attend one of their workshops.
Whether or not you use Successware, you will need to go through the pricing exercise with each of your products. Your cost of sales may differ with each product, but you should strive for around 15- 25% in order to be profitable. If you make more money you can work less and have time to enjoy your family and your life.
