I get asked often about pricing and why photography seems so expensive. There are a lot of photographers out there and a lot of different ideas on pricing. I know photographers who will shoot your session and hand you a disk of 100 images all for $35, I also know photographers who photograph your session and then do a hard sell and will average more than $3000 per session! Thankfully I'm somewhere in between... I value myself and my artwork more than 35 cents per image but I understand that 3-5K is not in the budget either! If you're up to it, here is an explanation that I hope will shed some light.
I run a business, I have expenses and hopefully I have income. My goal is to have income that exceeds my expenses with enough left over to pay the mortgage and to stay in business so I can continue to pay my mortgage. I can't do that without a purposeful plan for my business. Here it is:
I have 3 major categories of expenses in my business. I'll list them in order of importance.
Overhead is what it costs me to hang my shingle out and say I'm open for business. Cameras, lenses, memory cards, lighting, studio props and backdrops, computers, software, data storage, advertising, website, office equipment, packaging supplies, insurance, lawyers fees, professional development courses, education, etc.
2. Cost of Goods Sold (COGS)
COGS are expenses that I occur once I have a client. Think time and materials. Time for the phone consultation, meeting my client to set-up the session, time to shoot the session and then download, backup and edit the session. Time to prepare and conduct the sales session. Once the order has been placed I have lab fees to print and ship your products.
3. My Salary
What I pay myself - this is my job after all.
The goal for my business is to keep Overhead, COGS and Salary each at about 1/3 of my total revenue. Simple formula right?
Now lets crunch some numbers. Say I have $5000 in income for a month. That's good right!? I wish I had a $5000 paycheck when I had a regular job! If I averaged that for a year I'd have a $60,000 year. Not bad... Well, to stay in business I will have spent 1/3 of that on Overhead to stay in business, 1/3 of that on COGS and I get to keep 1/3 for my salary. So that's $20,000...hmmm not so great anymore. I could have made that flipping burgers somewhere. Oh and because I'm self employed, I pay self employment tax as well as income tax so I can count on Uncle Sam taking another 1/3 of my 20,000 leaving me with about $13,000. Well now that doesn't seem so great now does it?
Photography is a tough business. There are a LOT of photographers who have a camera and will shoot your photos for dirt cheap because they have no plan for staying in business - heck many of them aren't running a legit business (not reporting income, no insurance etc.). Many people just love photography and love to shoot family and friends! That's great, but please understand that I run a legit business and I strive very hard to provide you images and artwork that you will cherish for a lifetime and I plan on being around to photograph the many stages of your life.
If you've read this far, I hope you have a better understanding of my pricing and how I just can't compete with free or cheap photographers.
Thanks -- Jason