Calculator Magic: Pricing Your Work by Vik Orenstein

How to Price Photography

2016 Photographer's MarketWhether you’re just starting out as a photographer or have owned your own photography business for years, it’s a good idea to reevaluate your photography prices every now and then. In her 2016 Photographer’s Market article “Calculator Magic: Pricing Your Work,” Vik Orenstein covers the ins and outs of how to price photography. Keep reading for an excerpt below or find the complete photography pricing article in the 2016 Photographer’s Market or on Artist’s Market Online.

Keep creating and good luck!

Mary

Calculator Magic: Pricing Your Work by Vik Orenstein

Within the different specialties of photography, there are very different fee structures and methods for pricing work, but photographers in every discipline share one characteristic: We have all, at one time or another in our careers, charged too little for our work, or we’ve given up usage rights and copyrights for little or no compensation.

To be fair, it’s not just photographers who have trouble exacting their fees. I think its common among entrepreneurs and self-employed people across the board. I have a psychologist friend who jokes that she’s going to teach a seminar for other psychologists that will consist of nothing but three days of repeating the same phrase over and over: “That’ll be $200, please.”

Fine art/commercial photographer Doug Beasley says, “It’s somewhat arbitrary. I make up a number. . . . .

Though usage fees don’t often come into play in my portrait business, there are gray areas when a portrait client wants to use a portrait for a business application, or a business owner asks to sneak in a few portraits of her kids during a commercial shoot. Early in my career, I just swallowed my tongue—and the monetary losses—and allowed my clients any little favor, even if it violated my copyright. But now I, too, go by the book.

Most clients want to receive their digital files along with
any photo albums, photo books and prints they order, so
photographers like Hilary Bullock tend to charge an up
front fee that includes the shooting fee, a photo book,
and DVDs of part or all of the images.

HOW TO SET YOUR FEE STRUCTURE

Fee structure and pricing are entirely different animals. Fee structure refers to what the client pays for and when he pays it. For instance, this is the fee structure for one of my studios: The sitting fee is required at the time of the booking; the cost of the sitting is determined by the number of subjects; the sitting fee covers expenses (the client doesn’t pay extra for film, processing, proofs or anything else); the portraits are payable 50 percent upon placement of the initial order and 50 percent upon delivery.

That’s my fee structure. Notice that there aren’t any dollar amounts in there—that would be my price list.

 

. . . .

You need to find out what the standard is for your specialty in your geographic location, and use it with integrity.

PRICE STRUCTURE

Your price structure refers to what you charge for your products and services. Here’s the price structure for one of my studios: The basic sitting fee starts at $145; a black-and-white 5″ × 7″ (13cm × 18cm) portrait costs $89; a hand-painted 20″ × 24″ (51cm × 61cm) costs $850, and so forth. A commercial shooter’s price structure might look something like this: A basic day rate is $2,500 for limited usage; higher exposure usage doubles the day rate to $5,000; travel time is billed at 50 percent of the day rate.

How do you know how to price your work when you’re just starting out? First, you want to find out what your industry and market standards are. That is, what are other photographers who work in your city charging in your area of specialty?

Fashion photographers like Lee Stanford generally
charge a day rate that averages from $1,200 to
$8,000 depending on your market.
Editing/retouching and archiving may be built
into the day rate or may be charged separately.

Professional Organizations

One way to get up to speed fast is to join a professional organization like the one Doug Beasley mentioned earlier—American Society for Media Photographers. Not only do members receive a wealth of information on all aspects of the business, including how to figure usage charges, they also hold monthly meetings on issues like this very topic. If you attend these meetings, you can network with the people in the business, find out what they’re charging and get a feel for the pulse of your market.

. . . .

Apprenticeships, Internships and Assistant Work

Of course one of your goals, if you do an apprenticeship or work as an assistant, is to learn this aspect of the business. Remember the advice of our seasoned photographers: Don’t just learn how to set up lights when you assist—learn it all. When you work with an established photographer you get to see the how they put a price on their work, when they flex on a fee and when their fee is nonnegotiable.

This macro nature image by Brenda Tharp could
sell as stock and/or as decorative or fine art prints.
The same image can be resold, so it’s possible for
a single successful image to make a lot of money
for the photographer.

Informational Interviews

Informational interviews can be instructive in setting up your payment structure. You can also phone a few shooters and/or their reps and inquire about their basic day rate. Some may give you this information up front. Others may hesitate to make a blanket statement, preferring to make bids on a job-by-job basis.

Pick Up the Phone or Cruise the Web

Often photographers in portrait or wedding photography list their fee structures and prices on their websites. If they don’t, try e-mailing them or calling on the phone to ask for pricing details.

 

. . . .

Bargain Basement, Carriage Trade, and Everything In Between

Once you’ve discovered what the range is for prices in your market, you need to decide where within that range you want to position yourself.

 

. . . .

Perceived Value

If your billing rate is below market, potential clients will think your work is below market quality. This is because your prices tell the client how to perceive the value of your work.

 

. . . .

So where should a newbie position herself on the pricing ladder?

“Somewhere on the lower end of the middle—using your example range, I’d say just under the $1,600 mark. Don’t go for the low end, or not only will your perceived value be less but you’ll be competing with a huge pool of shooters. Remember, it’s crowded at the bottom. And don’t go for the high end, because you can’t justify that—at least, not yet—and you’ll take yourself out of the running for a lot of jobs,” says Pam.

 

. . . .

COGS, FIXED OVERHEAD, AND YOUR TIME

All your expenses including start-up, COGS (cost of goods sold), fixed overhead, pass-through and your own time, need to inform your pricing decisions. You have to charge what you need to stay in business, or you won’t be in business for long. I hear from many people who say, “Oh, I’d just be doing this anyway as a hobby, so if I just mark up the costs of my prints a little bit, I’ll be fine.” But as fledgling wedding photographer Stacey King discovered, that isn’t often the case.

. . . .

Price Point Appeal

There’s a whole psychology to pricing that could be the topic of several books all by itself. For some reason, $19.99 sounds cheaper than an even twenty. And 10 percent off gets just as many people excited as 15 percent off—but up the ante to 20 percent and watch them come out in droves. Two sweaters for the price of one doesn’t bring out as many shoppers as “Buy one, buy the second one for a nickel.” I don’t pretend to understand it. Sometimes the human animal is just a mystery.

. . . .

Leo Kim sells his macro food images as 3″ × 3″ (8cm × 8cm) prints in classic
gallery frames for about $20. He also sells them for stock through various agencies.

OH THE DRAMA OF IT

Given that money is a very sensitive, emotional issue for many of us—photographers as well as clients—how can we make these transactions easier on everybody?

Give all the bad news up front. Hiding or downplaying costs may get you a client, but it will never keep one. It’ll be easier to collect your fees and you’ll stay on good terms when the job is done if you give your client all the bad news up front. Reveal all fees that the client might incur in the process of his shoot. For instance, at all my studios there is an extra charge for the painting of additional figures in a portrait. Each subject after the first costs an additional amount. So, if the basic cost of an 8″ × 10″ (20cm × 25cm) is $50, and each additional subject is a $15 painting fee, then an 8″ × 10″ (20cm × 25cm) with three kids in it would cost $80: $50+$15+$15. We tell our clients about the additional painting charge before they book their photo session. It’s also stated boldly on our price lists and in our promotional material. This way the client never gets any rude surprises—and neither do we.

Know the difference between bids and estimates. In order to be considered for a job in such photographic specialties as commercial or architectural shooting, when the photographer is in essence acting as a contractor for the client, he will be required to give either a bid or an estimate of how much he will charge for the job. A bid is generally “written in granite.” Here’s a sample bid situation: Winsome Woman Magazine needs six outline shots for their May issue. Stanley Kowalski figures out what he thinks his time and expenses will be to do the job (if he’s smart he adds 10 percent on top of that, because, after all, surprises happen), and he agrees to shoot the job for that amount. That’s it—if it rains and he gets stuck on location with a trailer full of rental equipment and damp talent, tough cookies. He eats the extra costs—he may even wind up taking a loss on the job. But if he gets lucky and gets the job done in half the time and half the material costs, he still gets paid the amount of his original bid.

An estimate is a little different. Stanley figures it will take him two full days to shoot at $1,600 a day. Archiving and post processing will run $450. Any bad weather days will cost $800. So Stanley’s estimate for the job is $4,080, give or take a rain day. Technically, because this is an estimate and not a bid, Stanley is allowed to have his final bill come in at up to $4,488, or 10 percent more than his original estimate. Conversely, if Stanley gets the shots he needs in only one day and half the material costs, he should only charge the client $2,040.

 

. . . .

DON’T APOLOGIZE

I don’t know many people who feel comfortable asking for money on their own behalf. It’s almost always uncomfortable. But whatever you do, don’t apologize! Don’t shirk or cower, or say, “I’m sorry, the bill is $450.” It goes back to perceived value: If the client thinks you don’t believe you deserve your fee, he won’t, either. You did an honest job, and you collect your honest fee. Period.

Jim Zuckerman sells editorial travel images such as
this one through stock agencies.

DON’T GIVE AWAY THE INTELLECTUAL PROPERTY FARM

It’s always been difficult to protect intellectual property, and never more so than now. While more and more photographers are giving away their copyrights, it’s more important than ever not to join the pack. Not only will you be losing money on the reuse of the images you give away, you’ll be devaluing the quality of your work (your images could be reproduced shoddily and nonetheless they will still represent your work), and you’ll be devaluing your own image (you’ll be perceived as a bargain basement shooter and clients who are looking for the best photographers won’t hire you).

. . . .

WHEN A CLIENT VIOLATES YOUR COPYRIGHT

Don’t assume that every copyright infringement is intentional—sometimes it results in a lack of knowledge on the part of the client, and sometimes, as when the client is a large corporation, it’s a simple case of one hand not knowing what the other hand is doing.

If a client violates your copyright agreement, what should you do? I recommend taking action but giving the client the benefit of the doubt. When you approach them the first time, leave your big guns at home. Take the position, “I know this was an oversight/accident/misunderstanding, but …” Be prepared to tell the client exactly what compensation you require, and explain how you arrived at your figure. Most of the time, whether the violation was intentional or accidental, the client is willing to comply.

 

. . . .

RAISING PRICES

Many businesses have formulas they use to figure out when and how much to increase prices. I had one vendor that raised prices 10 percent uniformly, across the board, every year. It had nothing to do with actual inflation, their COGS or the economic environment—they just did their 10 percent increase each year, come hell or high water.

In some years inflation is nominal and the consumer index drops, so many businesses hold off on price increases temporarily. On the other hand, the cost of medical insurance, worker’s comp and rent in some areas have skyrocketed. So what’s a photographer to do? When and how much should she raise her prices?

A slow, steady increase is best. I made the mistake of going six years without a price increase. I’d like to tell you it was part of a brilliant marketing scheme, but the fact is, I was simply not paying attention. My COGS and fixed overhead were going up every year, but my business was growing every year, too, so my income was increasing even though my margins were dropping. Then suddenly, I woke up and smelled the coffee. My trusty accountant told me, “You know, Vik, you should be hanging on to more of this money you’re bringing in.” So I checked around my market to see what my competitors were charging and raised my prices about 20 percent overall.

 

. . . .

The bottom line on pricing your services is this: Always do an honest job for honest pay. Learn what your industry standards are and position yourself within those standards according to your ability and experience level, taking into consideration your costs and the realities of your market. Don’t let your emotions get in the way of collecting fair fees.

Ibarionex Perello says it very well: “You need to charge enough for your work to get your clients to give over their complete and total trust in you. Not only that, but the less you charge, the harder you’ll work, because your clients will respect you less. You may think you should charge less than market value because of what you don’t know. But you should charge based on what you do know.”

Don’t give away your copyrights. Intellectual property is still property—you wouldn’t give away your house after all! And keep your price increases slow and steady. Do all this, and your clients will respect you, and you’ll respect yourself.


Vik Orenstein is a photographer, writer and teacher. She founded KidCapers Portraits in 1988, followed by Tiny Acorn Portraits in 1994. In addition to her work creating portraits of children, she has photographed children for such commercial clients as Nikon, Pentax, Microsoft, and 3M. Vik teaches several photography courses at BetterPhoto.com.

Excerpted from The Photographer’s Market Guide to Building Your Photography Business © 2010 by Vik Orenstein. Used with the kind permission of Writer’s Digest Books, an imprint of F+W, a Content + eCommerce Company.

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