One process that plagues many photographers is setting pricing. Whether you’re just starting out or re-evaluating your business, having a deliberate process for determining your pricing is key. One of the common complaints among photo buyers, whether they’re professional art buyers or consumers, is that pricing seems to simply be arbitrary. To a certain extent they’re correct, but being able to justify how you’ve arrived at your pricing goes a long way towards blunting some of that criticism.
Understand your market. Most photographers work locally, some work regionally and a very few work nationally and internationally. Understanding where you fit within this spectrum is very important. It’s also important to realize that there’s not necessarily a skill or worth judgement associated with where you fit into this. I know many incredibly talented photographers who work primarily locally, as well as a few that have national clients that I’m not particularly impressed with. Shoots with local clients usually are not going to fetch the same rates as those for regional or national clients. We’ll get into why later.
Understand you genre. How difficult is it to do what you do? As technology progresses and cameras get easier and better you’re going to have to continually up your game. 10 years ago one could make a reasonable living shooting pretty good pictures. No longer. Now with a $600 dslr just about anyone can take a pretty good photo. The technical constraints and concerns that made 80% of photos difficult have pretty much disappeared with technology. I’m not insinuating that a trained and experienced photographer won’t do better than an amateur given the same equipment. But the fact is that difference may not be immediately apparent to many clients. You need to be drastically better than Uncle Bob and his Digital Rebel. If you specialize in a genre that is very technically difficult (food, aerial, architecture and political to name a few) you can charge higher rates because you have skills and talent that are rare.
Understand the usage. Understanding how photos will be used is of course critical to shooting a great image. It’s also critical to pricing it well. Most of us are used to buying scarce resources (i.e., commodities). The gas station doesn’t care whether I put a gallon of gas in my car or if Bill Gates puts it into his limo, they charge us the same. Gas is a commodity, it’s pretty much the same everywhere you go and once it’s sold it’s gone. Photography is intellectual property, not a commodity. It’s not scarce. I can sell the same image over and over. Pricing for commodities (gas, oil, pork bellies, whatever) is based primarily on supply and demand. Intellectual property can’t use the supply and demand model since there’s an unlimited supply. Another model is needed. A good marker to use for determining pricing for IP is impact. A cheeseburger photo used in a menu for a small carryout will be seen by FAR fewer people than that same shot used on the menu for a national restaurant chain. As such the usage fees should be higher for that national chain. Bigger impact, bigger fee.
Time involved. This is the classic day rate model of pricing. I know lot’s of photographers who use this model still but I feel it’s outdated as the sole model for pricing. How long a project takes certainly needs to be considered when determining pricing; it just shouldn’t be the only factor.
Production costs. These are the actual, physical, tangible things you need to purchase, hire, rent, steal, etc. to get the job done. I try to avoid using the term expenses because that insinuates actual costs involved. I mark up my production charges and I feel I have a right to. If a client asks for receipts I’m happy to provide them but with the understanding that production charges are not the same as actual expenses. After all, you should be able to mark up that makeup artist that you helped train for years, or that print that you spent three days working with the lab on to get just right.
PITA Fee. This is an internal consideration I use when figuring out how much of a Pain In The Ass a client will be. It’s not particularly nice – but if you’re a pain to work with, I’m going to charge you more to make it worth my while. I’m a photographer because I love it. If a client is going to make me hate photography, it had better be worth it. Of course don’t itemize the PITA fee on the bill.
Finally, you need to understand your Cost Of Doing Business (CODB.) How much does it cost you to keep the lights on, the doors open, the gear in working order, pay your salary, etc. Leslie Burns Dell’Acqua has a great article on her site here about this. Read it and understand it.