An Overly Complicated, Yet Ridiculously Simple Explanation of Supply and Demand in Photography

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While being the inexpensive option might attract customers in the short run, it soon becomes obvious that this is not sustainable. You will also soon understand why so many photography businesses fail. If you don’t figure that out soon enough, you will sadly be one of them.

All business startup education begins with the same basic things. What are you selling, is there a demand for it, how much are you going to charge for it ,and how are you going to sell it? Photography businesses already know what they’re selling, even if they haven’t dialed it down into specifics. The rest, however, is still stuff that needs to be figured out, the sooner the better.

Demand is where everything begins. It’s also where everything begins to fall apart.

Images have always been an important part of the human story. Once upon a time humans recorded images on rocks. Now, almost everyone in the industrialized world has a camera in their pocket. They also just happen to be able to make phone calls with it as well. Billions of images are snapped off every day. In a world of image overload, it would be easy to argue that people don’t really need to pay someone to take those images for them. There’s no denying that certain types of professional photography have been impacted by this technology. And yet there are still photographers making a living with personal use, consumer based photography. This is the type of photography that most new businesses offer.

While there will probably always be a demand for certain photography, there will also always be a supply of photographers. The challenge with this particular industry is that the supply of photographers can easily outpace demand. The old joke that the only thing it takes to be a photographer is a camera and a business card isn’t (technically) far from the truth. There is no formal education requirement, no professional regulation, and the tools of the trade are laughably inexpensive and more than capable. Websites are cheap, social media accounts are free, and even a monkey can take a noteworthy image.

I often point out that it isn’t the best photographers who make a decent living. Nor can you say that the most, or least, expensive photographers make more money over their careers. Very few in the industry rise above the sea of sameness and become icons. Even when they do, they are soon followed by the tide of trend hunters, and that sea of sameness becomes the norm again.

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So given the odds that your particular business won’t rise to the level of icon, how do you lay claim to some of that demand that everyone is struggling after?

This is where the mistakes begin.

Remember that next question? How much are you going to charge for it? This is where a lot of startups fall back on their Economics 101 class in school.

When supply is higher than demand, the market drives the price down.

So that’s what they do. They go in with the lowest price. While your economics teacher told you this is how free market works, I hope they also pointed out that you can’t sell at a loss and make it up in volume. So while being the inexpensive option might attract customers in the short run, it soon becomes obvious that this is not sustainable. You will also soon understand why so many photography businesses fail. If you don’t figure that out soon enough, you will sadly be one of them.

So if creating demand by price isn’t a sustainable strategy, what is?

Sorry. I’m about to bore you with more economics. But I’m going to cut to the chase and give you something to be excited about instead. If the previous explanation is your total understanding of supply and demand? I’m happy to tell you that your understanding is wrong.

Or at least incomplete.

The simplest explanation of supply and demand assumes something call elasticity. Before you fall asleep, all that means is that the stuff in the supply pile is pretty much the same as far as the person who wants it is concerned. So why shouldn’t they go with the lowest price? Wouldn’t you?

To make matters worse, photography isn’t an essential product or service. That was made clear during the 2020 pandemic response when governments declared which businesses could and could not operate as “essential”. Money spent on photography is discretionary, some might say luxury. The even worse news is that luxury purchases have probably the most elastic demand of all. In other words, competition is fierce, and if the price is high, people won’t buy.

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But you already knew that.

So what’s the answer?

Simple. Get yourself off the elastic pile. The answer might be simple, but actually doing it isn’t so simple. You’ll never completely make your offer inelastic, because there will always be a substitute and the only survival requirement will be that of your business, not your customers. They can certainly live without you. You, on the other hand, can not survive without them.

Which should be all the motivation you need to break out of the pile.

Remember why price wins? Because the consumer sees no worthwhile difference between their options. The photography is comparable. Someone is always available. The quality and quantity of products and services is close enough. There is a vast sea of sameness where countless indistinguishable photographers drown. They hold up price hoping that the customer will grab on and help their business live another day.

Get out of the sea of sameness. Set yourself apart. Whether it’s the photography you offer, the customer you serve, or the way you do it, find the thing that makes you different. Create gaps between yourself and the cookie cutter competition. Make it your goal to get to the point where you and your customers can say “there is no comparison”. For the right customer, who has found the right photographer, price does not matter nearly as much as the business beginner might believe it does.

How and what you choose to do will be as unique as everything about your vision for your business. You can figure that out on your own or you can seek out help among your peers who have successfully done it. At the very least, you should begin with an understanding of what that vision is. Then you can begin your plan for getting there.