Think pricing your photography is overwhelming? You’re not alone. If there’s one question that every photographer struggles with time and time again, it’s how to price their products and services.
- How should you price your photos?
- What products should you offer?
- How do you make sure your prices are high enough to make a profit, but not so high that you drive away business?
No matter how hard you’ve worked to develop your client base, if you don’t have a consistent and effective pricing model in place, you’ll find yourself treading water. Luckily, it doesn’t have to be hard to come up with a pricing system to help you reach your goals.
To figure out what you’ll need to make annually to run a successful photography business, we’re going to break your expenses down into two important sections: the cost of doing business (CODB) and cost of goods (COGs). Then we’ll explore session and product fees to determine how you can price for profit and success.
Considerations
When it comes to pricing, there is no one size fits all solution, so be sure to tailor your prices to fit your specific needs. Before we get started on pricing in detail, here are a few considerations you’ll want to keep in mind throughout the process.
Target market
Your pricing should be reflective of your target market. If you’re targeting high-income families in a wealthy area, your prices will be much steeper than if you were targeting budget buyers with more modest incomes. There’s truly no wrong target market. It’s all about defining your goals and knowing your niche.
Location
Consider your location. Do you live in an area with a high population or a smaller area with a narrower potential client base? Also, consider your local competition. While you should never construct your pricing based solely off of what your competitors are offering, you don’t want your prices to be drastically off base. Get a feel for what’s selling in your area and for how much, and use that as a baseline. Then adjust according to the specific needs of your business, which we’ll discuss in more detail below.
Niche
Although there is no set rule about which fields of photography charge more or less, it’s helpful to consider your niche or genre when coming up with a pricing list.
For example, if you’re a wedding photographer, consider all of the work that goes into shooting and editing a wedding. Chances are you’ll be there for at least four hours, and that’s a very conservative estimation; many wedding photographers provide around eight hours of coverage on the big day. That’s why wedding photography packages can run upwards of $ 5,000 in some markets. Other niches are less exhaustive and time-consuming, so prices tend to be somewhat more conservative.
Measuring your cost of doing business (CODB)
Your cost of doing business refers to any non-reimbursable costs directly associated with running your business. These costs include internet fees, telephone, advertising, software, equipment purchase and maintenance, office supplies, etc. (this list is not exhaustive, think of everything you pay monthly whether or not you have any paying jobs). Calculating your CODB can seem overwhelming at first – especially to those of us who aren’t mathematicians – but it is an absolutely essential part of developing a realistic and profitable pricing model.
Math time! Don’t run away just yet, it’s simpler than it looks. Your CODB is the result of an equation. It is determined by adding up your annual expenses plus your desired salary, then dividing by the number of billable days (think of this as the number of shoots) for that year.
For example, if I have $ 30,000 in annual expenses and I want to pay myself a $ 45,000 salary, I know need to bring in $ 75,000 per year. If I plan to do 2 photo shoots per week for 48 weeks (accounting for four weeks of vacation), I’ll be looking at 96 photo shoots per year. $ 70,000 divided by 96 is about $ 781. This is the average amount I need to make in income per shoot, through session fees and products. Here it is broken up for easier reading:
- Annual non-reimbursable expenses: $ 30,000
- Plus salary desired: $ 45,000
- $ Equals: 75,000 in total annual expenses
- Weeks worked: 48
- Times 2 Shoots per week
- Equals: 96 shoots per year (needed)
- $ 75,000 ÷ 96
- Equal: $ 781 per shoot/job
Sound complicated? It doesn’t have to be. The National Press Photographers Association offers a free CODB calculator to help you figure out your annual CODB. Keep in mind that the numbers they’ve plugged in are estimates only. Yours will vary.
If the annual calculator seems overwhelming, try breaking it down by month. Many people find it helpful to break it down by month instead of looking at annual expenses. Digital Photography School offers a free monthly CODB worksheet that can be used for calculating CODB by month. Add in your own numbers and categories as necessary.
Your numbers don’t have to be exact but try to make them as accurate as possible. Once you have an idea of what your CODB will be, you can use this number to determine what you’ll need to charge to keep your business running and pay yourself a suitable salary.
Measuring your cost of goods (COGS)
By Anne
Think that the cost of goods just refers to the cost of the prints you sell? Think again. If you want to price for success in the photography business, you need to factor in both materials and time.
As defined on Investopedia, the cost of goods consists of; the direct costs attributable to the production of the goods sold by a company… including the cost of the materials used in creating the good along with the direct labor costs used to produce the good.”
By Sean MacEntee
This means that you need to factor in your time and labor on top of your material costs. Calculating material costs is simple, but figuring out your time can be a little more challenging. You need to account for all the time that goes into a client session, from the first phone call to the moment they receive their products. A typical workflow will look something like this:
- Initial inquiry or phone call
- Pre-session consultation (in person or by phone)
- Session (time spent shooting)
- Editing photos
- Reviewing photos with client
- Ordering prints/products
- Inspecting prints/products
- Packaging prints/products
- Delivering or shipping prints/products
Estimate the average amount of time you spend on each of these pieces of the puzzle. Many photographers figure in this time to be covered by their session fee, which we’ll dive into in the next section.
What am I charging for?
The session fee
Sometimes referred to as a creative fee, the session fee is typically due in full prior to the session (this helps ensure you don’t have no-shows). This fee covers your time and creative talent as a photographer. By determining the amount of time you usually spend per shoot (as discussed in the previous paragraph), you can establish a base session fee.
First, determine how much you want to make per hour. A simple way to calculate this is to divide your desired salary by the number of weeks you plan to work and the number of hours you will work each week. For example, from our numbers above:
- $ 45,000 per year desired salary
- ÷ 48 working weeks
- ÷ 40 hours/week
- About $ 25/hour
Keep in mind this is adjustable based on your own perceived value. If you plan to make more per year, your hourly rate will go up.
Then, multiply your cost per hour by the average number of hours you expect to spend on each client. For example, if you plan to spend an average of five hours on a single client from start to finish at $ 25/hour, your session fee is calculated as follows:
- 5 hours
- x $ 25/hour for your time
- $ 125 per session (not including products, which we’ll discuss shortly.)
This is a fairly average price for a 1-hour photo shoot in most markets. Remember, this fee is in place to reserve your time and creative talent.
Prints and products
Your prints and products should be priced according to the amount of money you need to bring in per shoot after your session fee. In keeping with the example above, let’s say we need to bring in $ 781 per shoot. The session fee will cover $ 125 of this, so you need to sell an average of $ 656 ($ 781 minus $ 125) per shoot in products.
What products will you be selling?
To start, figure out what products you’ll be offering to your clients. Don’t worry about including everything if you’re just starting out. There’s plenty of time to expand your product line as you grow. Typical photographer product lines include:
- Prints in a range of sizes from 4 x 6″ to 30 x 40″
- Framed prints
- Canvases or gallery wraps
- Albums
- Digital files
What do I charge for these products?
To figure out what to charge for each item, you’ll want to add your marked up hard costs to your labor costs. We’ll use an 8×10 print as an example.
1. Determine hard costs
First, figure out what the print will cost to order from your lab. Add this cost to your other hard costs, like shipping and packaging materials. For example:
- Print cost: $ 3.50
- Shipping cost: $ 5.00
- Cost of your packaging materials: $ 5.00
- Total: $ 13.50 hard costs
2. Mark up your hard costs
Next, it’s time to figure out your product markup. A commonly recommended markup for photography products is 2.85. So in this case: $ 13.50 x 2.85 equals total: $ 38.48 marked up hard costs for that 8×10.
3. Calculate your labor time
Then figure in the labor time for each item, being sure to include time for post-processing, ordering, inspecting and packaging. For example:
- 10 minutes for post-processing
- 2 minutes to place order with your lab
- 3 minutes unpacking and inspecting photos
- 5 minutes packaging for delivery
- 5 minutes scheduling a pickup time or dropping off at the post office (If you meet with your clients in person this may be a longer meeting, so account for that too).
- Total: 25 minutes labor time
If we’re calculating your time at $ 25/hour (as discussed in the above example dealing with session fees), the cost of labor for 25 minutes is about $ 10.50.
4. Add marked up hard costs to labor time
- $ 38.48 hard costs
- $ 10.50 in labor costs
- Total: $ 48.98 rounded to the nearest 0 or 5 and you’ll end up with a retail price of $ 50.00 for an 8×10.
This is a typical price for many photographers. Adjust accordingly based on the considerations we discussed in the beginning; your target market, location, and niche.
If your target market is a high-income community in a location where your niche is highly in demand, you can adjust for higher prices – try a 3.5x markup or even higher. But if your target market is a bit more budget-conscious, consider sticking with a 2x markup instead of 2.85x. Just be prepared to do a higher volume of work in order to reach your desired income.
Follow this process with each item on your product list, being sure to account for the extra time it takes for items like albums. As always, keep in mind that these numbers will vary depending on your hard costs and time spent processing and packaging each order.
Conclusion
Taking the time to establish an effective pricing model will put you well on your way to creating a successful and profitable photography business. We know it’s not as fun as getting out in the field and shooting, but you’ll find it’s a necessary part of taking your photography business (and profits) to the next level.
The post How to Price Photography Products and Services for Profit by Chelsea Lothrop appeared first on Digital Photography School.