This Photo Costs: Whatever The Market Will Bear
I’m going to jump on a soapbox here for a moment and respond to an increasing trend that I see in the amateur and semi-pro photography world as of late. The topic at hand is the pricing of photographic works and how to justify costs. Specifically, I have seen a few photographers – including a few friends (sorry guys) – who have written blog posts or articles talking about all the contributing factors that affect the cost of a photo. Unfortunately, I think most of these posts tend to turn into rants and the prices that are quoted are astronomical. For example, following the same logic, the photo shown here costs $5400 if you factor in the cost of my gear, my time spent, the gas used to get to the site and so on. But if you were to follow the same logic, you’ll never make it in the real world of photography. Do not lose sight of the difference between operational costs and the price in which the market will bear. And so I felt the need to discuss these differences and bring you all back down to earth
Operational Costs Should (Mostly) Be Ignored
Operational costs would include things like your camera, the lenses, the software (including billing and word processing software), even things like your internet connection and your phone bills. Basically, if it’s a tool needed to conduct your business and it’s not specific to a single task, then it’s an operational cost. Now hypothetically, if you were a startup, you’d be operating in the red for a while and at some point you would break even. Maybe at some point you’d make enough profit that you could invest some of that money back into the business as operational costs: Maybe a camera upgrade, or the latest version of the software. But you wouldn’t bill any of that to a single job, nor would you consider it part of the price for any of your photos. These types of costs – also called ‘overhead costs’ – get spread out across the lifespan of your business and across all your clients. But only a small percentage can actually figure into the price of your photos. In other words, you wouldn’t tack on the price of your camera into the cost for every photo. If we could do that, we’d all have Nikon D4’s. Or, more likely, we’d all be out of business. As a general rule of thumb, any such investment is generally spread out across 5 years or more.
Now, say you have a day job outside of the photography world and you only do photography as a hobby or at a semi-professional level. You are selling you works or offering your services to feed your hobby. Don’t take offense, from the business perspective, that’s exactly what you’re doing. Truth is that you don’t really have any overhead costs. The cost of your camera, the cost of your software or your laptop all figures in, of course, but many other business expenses just don’t exist. Health insurance, your retirement plan and so on is covered by your day job. And let’s be blunt, if your photography venture fails, your primary income still exists, so there isn’t as much of a risk to plan for. The gear still factors in, but the actual cost is surprisingly quite low if divided across all of the photos that you’re going to sell. What it all boils down to is that your operational costs for such a scenario are actually quite small. And so it would be incredibly unfair to factor such costs into the cost of each photo.
Market Value Is The Real Bar
The bar is set by the market. It’s a basic economic concept: The consumer is willing to pay $X, you’re able to produce it with $Y. The difference between $X and $Y equals $N, which is your profit. If $N is small or a negative number, you need to figure out a way to either produce the product for less, or somehow convince the consumer to pay more money. From experience, I can tell you that it’s a harder sell to convince anyone to spend more money unless you have something unique or special to offer. So from a photography perspective, you either need to make your process more efficient so that you can increase volume, or you need to develop a characteristic style that makes you stand apart from the rest.
But let’s face facts for a moment: Consumers comparison shop. So if you don’t have a characteristic style, and your style can be matched, you’re going to be competing with everyone else out there on the market. This is the cost at which the market will bear, and it doesn’t fluctuate much.
There are two essential paths you can follow if you want to get ahead: Volume or Uniqueness. The trick to volume is efficiency; efficiency in your process, in your work flow, in your marketing conversions and in your management. You’ll need to eliminate anything that would prevent you from doing and producing more volume. Of course you can get above the market value if you have a unique quality to your work that separates you from your competition. If you can build up a demand for your work, you can almost charge anything you want.
When rising above that bar, please do yourself a favor: Get there through the merits of your work. Do not try to pity your way into a sale. Do not try to explain to your client how upside-down the world may be. And of all things, do not try to list the operational costs and how your expensive equipment figures into the price of their photo. Because the truth is that every business has operational costs, and your potential client is well aware of that. Trying to educate them in that manner? Well that’s a turn-off and likely a lost sale. Because in the end, you’re the one who sounds like they don’t know what they’re talking about.