Pricing!? Digital files? Social media files? Prints?

[William W]

Hi Bill, perhaps there is a cultural gap here or my text is failing to express myself accurately. I am in no way defensive!

Good. Understood.


So man to man – I would like a no nonsense answer only to two questions

Are you writing up a precise and concise Definition of the Business?

Will you refer to that definition as THE reference for all the major business decisions, including building the BUSINESS MODEL and will the DEFINITION of the Business guide you in all the minor, day to day business decisions?


WW

[Colin Southern]

Three simple rules put to me by a senior vice-president of an internationally known consumer goods company:

1. If the items are flying off the shelf so quickly that you can't keep them in stock, you are likely charging too little for them;

2. If the items are sitting on the shelf and not selling, you are likely charging too much for them; and

3. There is no link between your production costs and what a customer is willing to pay you.

I'm not sure if this helps at all, but over the years I have found that all three statements are 100% correct...

I agree, but I tend to look at it slightly differently. Folks have a PERCEPTION of what something is worth to them; if what you're asking is more than the PERCEIVED value then they won't buy. So if something's not selling it's not necessarily because one is "charging too much" probably more a case of "one charging more than the prospect perceives them to be worth". Subtle difference perhaps, but I think that difference is important. The "easy" option is to simply lower the retail price; unfortunately, that doesn't lower production price -- so profit margin takes a disproportionate hit. The preferred option is to revisit how the prospect is being educated as to the value.

Perhaps a good example might be one from my SCUBA diving instructor days ... back in my day the average cost of an Open Water Diver certification was about $250 ... and yet I heard of this dude who was charging $10,000! The initial reaction was "$10 grand - you're joking right". Diving a little deeper (pun intended ) we discover that for $10,000 you don't just get the Open Water Diver certification, but you get the Advanced Open Water certification as well ... ah ... so 2 courses rolled into one. Better value for sure, but not $10,000! Oh - and when you learn with this dude, it's one-on-one instruction - not bundled in with 8 other students. Again - more information helps us understand why it's a better deal than the $250 course. Still a big leap to $10,000 worth of value though - so what else does he offer? He offers to conduct the training anywhere in the world that you'd care to do it. Bingo. Not for everyone of course - but two things are interesting (1) At $10,000 -v- my $250 I'm sure he made a lot more money than I ever did, and (2) He was booked up for 3 years in advance.

I think the message is "one can charge a lot more for something, but it's important to articulate WHY it costs more". In the case of a photo, without the education, charging $5 for an 18c print is a rip off; with the education, pointing out the $100,000 worth of gear that we used - and the 30 years of experience that went into the decisions - and the hours of care that went into post-production - $400 may seem like a bargain.

Perception is EVERYTHING.

[Colin Southern]

Right now it's fun to do and I'm not trying to make too much doing it. I expect that over time I will get more interest and I will raise my rates to avoid getting too busy with this, or maybe I will lose interest in doing it myself, who knows?

Hi Brian,

Fun is good -- point I'm trying to make though is that if you don't charge enough it's not so much as a case of "maybe I will lose interest" so much as it is "slowly but surely, it will methodically KILL the interest".

I think a lot of us do it initially for the "warm fuzzies" (wow - that's so neat - you're such a talented photographer) - and that's reinforced when we start making a little money (heck, we'd do it for nothing 'cause we get mentally stroked by all the nice feedback) ... but the "costs" creep up and before you know it you find yourself in situations where folks EXPECT you to do it - and they want you to run around after THEM. You turn up and they're not there -- and when they do turn up it's like "soz - was chatting to an old friend on Facebook". And you start to ask the question "why do I even bother".

Just some warning signs to watch out for anyway

[Colin Southern]

PS: A good eye opener is ...

http://www.amazon.com/Commercial-Pho...8357288&sr=1-5

[Maritimer1]

Bill, I greatly appreciate the advice and know it was likely worth a few hundred in consultation fees. Colin, you need one of those stamps, too, for all the great insights and tutorials you provide.

Just read your bio, Bill. At some point in time over the past few months, based on some comment you made about your grammar, (which I seem to remember I noted was impeccable) I assumed English was not your first language. That will teach me not to jump to conclusions. Interesting bio.

[Mark von Kanel]

I think a lot of us do it initially for the "warm fuzzies" (wow - that's so neat - you're such a talented photographer) - and that's reinforced when we start making a little money (heck, we'd do it for nothing 'cause we get mentally stroked by all the nice feedback) ...

Thanks for the warnings Colin this is exactly where I'm at!

[William W]

double post

[William W]

(ASIDE) . . .

At some point in time over the past few months, based on some comment you made about your grammar, (which I seem to remember I noted was impeccable) I assumed English was not your first language. That will teach me not to jump to conclusions. Interesting bio.

haha – that cracked me up.

Was that the quip: "I am not an English Teacher nor am I a Teacher of English"

English is indeed my first language.
English Grammar was flogged (literally) into us by both our English and History Masters, when I was at High School but the groundwork was done by my Headmaster at Primary School, who also literally flogged into Year 5 and 6 Students the wonders of: Grammar; Poetry; Geometry and also neat Handwriting.

I still use a Fountain Pen (actually many), but my handwriting is now up the spout.

Nice place: Canada, nice people I found. I covered the Victoria Commonwealth Games.
Horses are pretty neat, also.

WW

[speedneeder]

Good. Understood.


So man to man – I would like a no nonsense answer only to two questions

Are you writing up a precise and concise Definition of the Business?

Will you refer to that definition as THE reference for all the major business decisions, including building the BUSINESS MODEL and will the DEFINITION of the Business guide you in all the minor, day to day business decisions?


WW

Bill,
Not sure what you define as a business definition. I want to take photos, spending a maximum of 10 hours a week doing, weeks with zero hours are OK, and I want to make at least $25/hour doing it. The type of photos I plan to take are sports photos and portrait photos. At no time will taking photos take priority over attending functions with my family (such as their ball games!) Does this satisfy a business definition?

[William W]

Yes - Getting close.
I understand you want to keep this simple – I was never suggesting that it would be a complicated Definition that you would write.
I would suggest more discipline in defining the ALL the KEY parameters.
I write formally: I am not suggesting you write formally - I AM SUGGESTING more discipline in defining the parameters with very precise words.

“I want to take photos, spending a maximum of 10 hours a week doing, weeks with zero hours are OK, and I want to make at least $25/hour doing it. The type of photos I plan to take are sports photos and portrait photos. At no time will taking photos take priority over attending functions with my family (such as their ball games!)”

I would write:

The business will PRODUCE Sporting and Portrait photos for sale.
The business will occupy no more than a TOTAL of 10 hours per week, of my time.
The business will be viable if there are weeks which I do not work at all.
The hours I work in the business, will not encroach on my family time –and I will decide that on a day to day basis.
The business will TURN OVER enough from each ENGAGEMENT such that I will make a NET PROFIT of $25 per each hour for I have worked on that ENGAGEMENT.
*The Business will provide fun and enjoyment for me.

(*I have added this last sentence in the definition because I think that criterion is important to you.)

If that definition is suitable: then you can build a BUSINESS MODEL including PRICING to always fit that definition and you can always refer to that definition for EVERY business decision you make.

So applying that Definition to the original question, your choices will become clearer and narrower, even if you get to a sticking point, such as the last question:

For example these are extracted questions from the Original Post:

Q -“As far as products go, I am a little conflicted on this. I mean, I could offer a list of 1000 different ways to buy a photo - different sizes, ready to hang, on a mug, etc.? ? ?”
A – No 1000 items would not be fun for me.
A - No 1000 would take too much time for me to manage.

Q - But is that what people really want, I don't know if people want 1000 options?
A – I don’t care if they do want 1000 choices: that doesn’t fit within the definition of my business.

Q - I was basically thinking to charge 20% more than I would for an 8x10 print. Is this enough? Too much? I really don't know?
A – But I know how to find out – at least how I can give myself a guide to fit my definition of the business. I need to predict (guess) how many prints each portrait sitting will buy and then work out what I have to sell them for to make the profit in my definition.

A – Easier still - I could make a package of a Portrait Sitting and 4 prints for $xxx and I could roughly guess how much time is involved in doing the shoot and running around and the $xxx would be a standard fee that would work out approximately $25 per hour profit for me – that’s nailed the basic Portrait Prices – and I don’t care if people do not initially want to buy the package of four prints – because how I work and after all I am doing this for fun.

A - On the other hand I could also make a package of sitting plus prints and sell the files . . . Hmm I think that would fit into the definition, but what might be the downsides?

[thinking . . . ] maybe low res would be OK – if I gave them Hi Res they will want to print them themselves . . . will that be a hassle for me if the PRINTING is crappy –
Hmm, the definitions says I will only work 10 hours per week and the definition says I will not allow the business to impact on my family time . . .
do I want customers complaining about the photos they printed? ? ?
that will take up time ? ? ?
Does that happen often ? ? ?
How will I manage that not encroaching on my family time? ? ?
I don’t know, but for the moment I think I will not spend any more time on that, because that is spending time on the business and in the first instance I will keep it simple an just offer a sitting and prints and maybe low res files for the kids facebook accounts etc, as I develop the business I will learn more.

WW

[speedneeder]

That's awesome Bill!
Thank you much for your input.
I like your approach.
I sometimes feel conflicted by exactly what you covered - how can I be all things to all people and be happy with what I'm doing? The obvious answer is that I cannot - this fits perfectly with what my gut tells me - and this really is OK. It reinforces what I already knew - I'm not interested in doing everything, and I'm not interested in doing it dirt cheap, and I'm really ok with it if someone doesn't want to hire my services.

[William W]

That's awesome

I am very pleased that you stuck with the conversation and now I am excessively pleased that “the penny has dropped” for you.
Yes, I understand that you had gut feelings and that you knew what you wanted to do – trust me I understand all of that.
But by “DEFINING THE BUSINESS” and then using that as your reference: you take away ALL the emotion and internal turmoil.
(especially for most males) it then becomes really easy to put each business question to the test of whether it fits in alignment with the Definition of the Business.

Thanks again for hanging in.

When I am next in Owensboro you can buy me a beer or a coffee – whichever suits.

Best Regards,
Bill

[speedneeder]

When I am next in Owensboro you can buy me a beer or a coffee – whichever suits.

This is Kentucky, I believe bourbon is the drink of choice

[William W]

I can do that.
CU around.

[drjuice]

I'd suggest that you go to a street fair (lots of them around in May and June) and find out what other photographers are charging for variously sized pictures. When I first started selling mine, I was kind of stunned that I sold out the first day and didn't have any left for the second day of the street fair. It turned out that I was charging only about 20% of what most of the other photographers were charging for photos the same size as what I was selling. So, the next time, I switched to their pricing model which was $n.00 per picture or 4 for the price of 3. I had a few left over at the end of the next two-day street fair the next time. Even so, the number of pictures I was prepared to sell was the same as the first time. I've stuck with that. My photos are matted in a cello wrapper (probably plastic but still archival. I usually take half a dozen framed pictures with me as well and hang them in the back of my booth area and usually sell several of those at about 6 times the price of the matted photos which includes (obviously) the frame (I usually get them at Ikea or Target).

HTH.

v

[speedneeder]

Thanks for the input Dr J!
I am definitely interested to know if I am underselling my photos, BUT, as this conversation has solidified in my mind, there is no way I would consider lowering pricing.

[Maritimer1]

Brian I so appreciate that you started this thread and have had such great feedback. It's helped me already. I was contacted by the person in one of my photos (the one in the last B&W comp called "Balancing Act"). The message said. "I really like it and want to purchase it." I almost gave in and let him have it at a lower price than I have on my site as he is someone I know a bit. With echos of this thread in my head, I simply posted the photo on my site and then sent him the link. Will he pay the price I have listed there? Probably not. Do I care. Not one bit. Would he give me a discount? Of course not. Do I feel like I have a more of a backbone? Yes!

[speedneeder]

Myra,
I think that's great.
I'm sure you added something to the the link like 'thank you for your interest in Myra Photo, I know you will love your print
I hope you make a sale.

[OldFrank]

Just got in on this thread and it's fascinating, especially the dialog on the effect of knowing where you are going in starting a business. From my perspective there are at least 2 factors that are important. First and foremost, what is your nature. What are you comfortable with. Some of us work better with a plan and others like to just enjoy the journey. My experience is that I will do best in the format that is me. Customers like a person who is having fun, is enthusiastic, and who provides something special.

Then there is the nature of the business. We are barely in the beginning of the age of digital photography and I doubt any of us can guess what is just around the corner. Here the flexible entrepreneur has the advantage of seeing and adapting but with the hazard of losing focus (no pun).

I'm about 75% into my second retirement, and sometimes feel that photography with be the next path.

frank

[Maritimer1]

Brian, you might find some interesing information here: http://asmp.org/tutorials/steps-dete...sing-fees.html