Every year I teach a class where we have a few assignments to help walk the students through pricing a project. I have noticed that many of the students would rather copy each others work than put in the effort to figure out the numbers for themselves.
I think to many people are making assumptions that are costly mistakes to their success.
Myth #1
Everyone's situation is the same. While people may say this isn't true their actions say otherwise. If you have researched the prices of other photographers and then charged similar price you might just be proving me right.
Many people who shoot weddings all charge similar amounts in a market. A new photographer comes along and sees that everyone is charging $2,500 to shoot a wedding. Upon further investigation that photographer finds out what is typically being offered with a $2,500 wedding package and after looking at how much it costs to make prints, burn a DVD of images and create a book sees that they can charge the $2,500 and still make a lot of money, so they offer the same package.
It really takes some time before someone will discover if this pricing will work.
Myth #2
Pricing is relative to the quality of work. Most photographers believe that a highly skilled photographer should be the most successful photographer. This is a very common mistake with any profession. Businesses fail everyday because people believe that it is all about the quality of the product.
The "Return On Investment" formula:
One of the best examples I have first hand experience in is with shooting sports. Most teams that use photography are using it to help promote the team. High schools and colleges need photos of their athletes for their websites and maybe a media guide. For the most part if they have an image they can use verses a Sports Illustrated quality image, the organization will not benefit monetarily from the better photograph.
Even on the professional level the great photograph of an athlete rarely translates into profits for the team.
I can say with confidence that if you have a great action photograph of the MVP of the league player you will see a difference in sales. Now if the photograph is equally good of a high school player who is an average player you will not see more sales. Why? The thing driving the sales is more about the performance of the player, rather than the quality of the photo.
The bottom line is that you must produce good photography to have someone pay you for it, but there are many other factors influencing the purchase rather than the quality alone.
Myth #3
How long you have been making photographs determines your pricing. The number one group I hear this from is college students who think that because they are a student they must charge less for their work.
A customer is looking for a photographer. They see a couple of photographers work on their websites. They like the photographs of one photographer. They basically will then check and see if they can afford that photographer to do the work.
The only time a customer is factoring in if someone is in school is when it comes to price. A customer needs some photography and they realize that they can save some money by going after a different photographer. The number one place most of these customers look is to students.
What matters the most to customers when hiring a photographer, is that the quality of work matches the examples shown by the photographer.
Experience cuts two ways in photography. Many customers are looking for a fresh eye and often see experience old style. Where too little experience can hurt you is when a client always goes for the safe and secure photographer. This is rare, but does exist.
Your Situation
You must know your situation and what you are trying to do with photography to know how to price.
Hobbyist
You enjoy photography, but have no plans to do this professionally. You are very happy in your profession and love what you do, but also like taking pictures as a hobby.
There are basically two types of hobbyist I see shooting today.
The first group is financially capable of buying their gear they need. They may even have enough money to make prints and give these away to their friends as gifts. I find a number of these photographers enjoy traveling and some enjoy shooting sports. To gain better access to things they like to photograph they offer to give their photographs to the groups they photograph.
They know that to get better photographs they need to be closer. So to move from the stands to the sidelines of their kids games they give their photos to the team so they can get better access.
The second group of hobbyist are those who need to help fund their hobby. They need to offset their equipment purchases. This group will price their work so they have enough income to offset their gear purchases.
Part-time photographers
One of the classic examples I see a lot of is a bi-vocational photographer. I have seen many school teachers who like to shoot weddings. Since most brides get married in the spring and summer months this works well with teachers schedules.
I have seen many professionals who also like doing editorial work of their profession. Many of the National Geographic Photographers have been biologists, anthropologists and other professions where they were experts in the field. Their photography and their profession go hand in hand.
Full-time photographers
Well I really don't have to go into the details here, but this group earns their living by photography alone.
Which photographer are you?
You really need to know which category you fit into and own it. If you are in any category other than full-time photographer and want to become a full-time photographer then you need to really understand pricing.
As long as you need another job to pay your bills because photography isn't generating enough income you cannot make the switch.
How to make the switch to Full-time Photographer
First you must take the time and know what your needs and wants are financially. If you have Microsoft Excel there is a great tool that comes with this to help you. There is a template in the personal section for "Household Budget." If you don't have this you can use the "free" Kiplinger online form to help you. (http://www.kiplinger.com/tools/budget/)
Second you need to know all the expenses related to the daily operation of the business. NPPA has a "free" online form for you to help. http://www.nppa.org/professional_development/business_practices/cdb/calculator.cfm
Third you will have to get a good idea of what you will offer and how many times a year people will hire you. This is like putting your finger in the wind if you have no idea. The best way to know this is to have been getting small jobs on the side of your full-time job. It is easier to get a feel for this by starting as a hobbyist and part-time photographer than just graduating from school or quitting your job and starting from scratch.
Once you know these three figures it is much easier to know how much you need to charge to do this full-time.
Myth #4
I can do that later. After seeing what you need to do to figure out your prices you decide that you are not ready to do all that work. You instead decide that you will work on your photography and when you get to that point where you think you are ready to go full-time is when you will work on that business stuff.
We all put off working on unpleasant or tedious tasks from time to time. I understand that completely, but procrastination is the surest way to failure. If you want to go full-time and remain full-time you need to take the steps I outlined to make the switch right away.
Let me tell you a little dirty secret about many of the full-time photographers. Most of them produce mediocre work. So how do they stay in business. They know what they need to charge and have no problems at all telling people their prices. They can say with complete confidence this is their price. They know that if they lower their price they are in essence then paying the customer to work rather than they being paid.
When you have done the math, you know the point at which you are making or loosing money.
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