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This could probably be titled “An Overly Simplified Explanation of Pricing for Photography” but it really just boils down to one main concept: Packages
Pricing is one of the most critical components of any business. For a business that sells a product or a service, the calculations are much more simple than a business that sells a service that creates a product, which is also then sold.
With photography, there is very little cost of raw materials to consider. The bulk of cost is in the form of time and expertise. Any thorough discussion of pricing for photography needs more than a single article. The foundation points to pricing for photography, however, are where everything else begins. Understand them, and you are on your way to everything else.
Pricing is a calculation reached by knowing your COST to produce what you’re selling, added to the amount of PROFIT you want to make. Cost in the overall pricing calculation means your total cost of doing business, which includes a lot more than just “how much time and gas do I spend taking these photos?”, but that’s a huge other discussion.
So for the purpose of this article, we’ll just say “cost”.
Knowing your COST plus PROFIT, divided by how many CLIENTS you budget (want to do), will give you an idea of what each client must be worth. Offer packages that bring you that price. Overly simple, but true.
So why packages?
As far as what to charge for any given project, if you offer your work in packages, you will simplify your life immensely. Also, clients want prices, not hourly rates or estimates. If you give them an hourly rate, expect them to start negotiating for fewer hours. So the best method is packages. For $x.xx, you will give your client YYY.
What is a package?
A package is exactly what it says, a bundle of specific products and/or services offered at a specific price. A photography package can use anything measurable, from number of hours a photographer will be available during an event, to the number of photographs provided, to the types and sizes of finished print goods.
So how do you determine the price per package?
You should know about how much time goes into producing the product from design to delivery, and use that with your desired hourly rate to come up with the package START price. Add hourly rates on top of the package price for any edits or upgrades beyond the stipulated deliverables in the original scope of work portion of the contract.
First it was packages, but now you mention hourly rate, and I don’t even know what it is or how to get it.
Even though you do not charge by the hour, you must still know what your time is worth and how much time you are spending.
Your desired hourly rate is determined by working backward from a lot of other figures, including your total cost of doing business, mentioned above. The starting point of your hourly rate is, understandably, how much money you want to make over a period of time and how many hours you want to work during that period.
Remember that you must cover your expenses, plus make your desired profit, so both are a part of your desired rate. The last thing you want to do is sell your time at a loss. As the old saying goes, you can not make it up in volume.
Avoid the Proficiency Penalty
Perhaps the ultimate argument against quoting by the hour is the fact that the client only sees how much time you spend with them and your camera. That could be as little as a few minutes, to many hours of the day. They don’t see the much longer time involved in processing, editing, presenting, and delivering the finished product. They don’t consider the time you spend communicating with them before a contract is signed, or the time spent preparing your paperwork and intake processes. You know these figures, the client does not.
Ironically, the better you become at all these other things, the less time you spend on them. Your expertise actually saves you time, but that same expertise makes you more valuable as a photographer. Does that mean your rate should go down because you now work more efficiently in less time? Quite the opposite is usually true. You should not pay a penalty for your proficiency.
And just when you thought you understood pricing, along comes licensing.
Another critical aspect of pricing is the cost of the license for use of the photos. This is really a huge topic all in itself so I won’t cover it here, except to say that your contract should be specific about the type of use you allow, and the value of that use.
This is not the same as your working time, this is an industry figure and there are calculators for this.
You should spell this out in detail in your contract, but don’t break it out in a pricing line item. In fact, avoid line items as much as possible, because these become the negotiating points with certain types of clients. You don’t want a negotiation, you want a signed contract and a fair price for the value of your work.
You can still work licensing into your packages. In fact, most photographers that produce personal use photography do exactly this. Commercial photography is far outside this discussion due to its highly customized nature. Wedding, portrait, and other personal consumer photography packages will spell out the usage rights in the contract and the licensing value will be included in the package price.
While pricing is a complex funnel of factors and figures, understanding how it all comes together is the first step in creating confident price points. Packages are a tidy way to offer set services at a price that works best for you and your successful business.
Remember something already mentioned, that bears repeating. You don’t want a negotiation, you want a signed contract and a fair price for the value of your work.