Wednesday, June 11, 2014

When Pricing Your Photography Don't Forget About the Hidden Costs

Our jaws probably dropped to the floor. Cheryl and I looked at each other, shook our heads and then looked at Cindy and said, "We can help you." haha

This morning, I went to coffee (which always means Zen Green Tea) with Cheryl (my best photography buddy) & Cindy (a photographer we've been mentoring together for a couple years). Our conversation wiggled its way to the all encumbering topic of PRICING. Cindy shocked us when she told us how many (too many) hours she's been spending editing her photos. Just the costs of her time & labor would force her prices up through the roof.

We grabbed a pen and paper and hashed out the finances of one photo shoot:

Cost of Goods:
Welcome Packet — $8
Shipping Cost for Welcome Packet — $5
Branded USB Flash Drive (for delivering images) — $10
Shipping for USB Flash Drive — $5

Cost of Services:
Hair & Makeup — $140
Photographer's Time — $50 / hr (2hrs)
Photo Editing Time — $50 / hr (2hrs)
or Outsourcing Photo Shoot — $20
Office Stuff (Sending Emailing, Phone Calls, Consultations, Uploading Images to Gallery etc..) — $50 /hr (2hrs)

Total Cost of Goods: $28
Total Cost of Labor: $460
Total Cost: $488

*And this is not even considering the overhead of just running the business. This is just specifically for one shoot — not thinking about more general expenses like paying for your editing software, camera equipment, online gallery subscription etc... We're just trying to keep it simple here. 

So anyway, we realized that we have to be charging about $500 minimum just to cover the costs of doing a photo shoot. We haven't even discussed charging for images/prints yet, which is where many photographers make their profit. If you sell images separately, and you charged $30 / digital image and you sold 30 digital images, now you're making an additional $900 for your shoot. That can pretty much be a large chunk of gross profit. Hooray!

If Cindy felt it was too expensive to charge $500 for a photo shoot and then an additional (up to) $99 for photos afterwards. She could fudge the numbers a little and take a risk. If she charges less for her photo shoot, say $200, then she needs to make sure she makes up the difference ($288) with print sales in order to cover the costs ($488) of producing that shoot.

However she breaks down the price, she has to be aware of the hidden costs that come with time & labor spent on a project. If she spent 30 hours working on a photo shoot, even if she charged $488 for the shoot and sold $900 worth of prints, she would still be in the red, not making enough money to cover her labor costs.

It's easy to brush aside labor costs when you're getting started and I'm actually really comfortable doing it myself. I don't think people should worry about it too much when you're just desperately trying to get experience and build a portfolio. At that beginning stage of your photography career, I think the best action you can take is to work as much as possible (even for free). Work and work and work some more!!! And while you're doing all this working, start getting into efficient habits. If you practice spending no more than 2hrs of editing right from the beginning, then once you graduate to the next levels of business and you really start to value the cost of your own time, you'll already be accustomed to working quickly to preserve your hard-earned money, not letting labor costs suck it away into the black hole that is Lightroom/Photoshop. haha

Set those timers on your phones, start working faster, and stop forgetting that your time is part of the cost of your product. Good luck my friends. :)