business of photography: when the “going rate” is too low
July 2, 2008 – 2:30 amLast week we looked at what charging a fair value means to photographers, particularly those just starting out.
So what happens when you start your business, you’ve calculated your cost of doing business, but people just aren’t willing to pay what you need to survive? Should you take these jobs anyway? Last week we looked at value as it relates to the photography industry. Remember, if you don’t charge enough to preserve the value of photography in general then the whole industry goes down and you go along with it. This week we’ll look at what the value of your photography means to your bank account.
I was talking to Kerry at cameradojo.com a couple of weeks ago about wedding photography in his market. It seems that a lot of photographers entering the market head straight to free online listing services to advertise. Is this a good or bad tactic? Well, it’s free so it sure couldn’t hurt, or so I wouldn’t think. I honestly have no direct experience with this.
But here in Cincinnati I see a definite pattern. Photographer ads are appearing on free online listing services and then five minutes later another ad appears above it, offering slightly cheaper services. Then someone offers to shoot for free for the experience. So how do you differentiate yourself and establish (and communicate) the value of your own photography?
When it comes to this situation I like to remove the word “photography” from the equation, because there’s a certain amount of emotion attached to it. Let’s pretend you’re not in the business of photography but you’re making widgets.
Say it costs you $5 to make your widget but the going rate for widgets is $4. Should you sell your widgets at a $1 loss? Maybe…sometimes there are reasons to. If you’re just starting out in the marketplace then maybe you will sell them at a loss to get your product seen and in front of people. But, obviously, this is not an effective long term plan for success.
If you sell 10 of your widgets at $4 then you haven’t made any money, you’ve actually lost $1 on each one. At some point you’re able to raise your prices to the going rate. If your widgets then sell for $5, you’re still not making any money, you’re merely breaking even on those particular sales. So to pay off the original loss of $10 you may have to raise your widgets to $6. You may have also incurred interest on the first loss, so now you need to charge $6.10 for your widget. But the going rate is only $5…will people buy yours for $6.10?
The reason we often use widgets to describe a product is because they are universal, faceless and lack character. Here’s the key to the whole thing…is your photography a widget or is it something special? Are you selling something truly unique (be honest)?
If you’re one of many portrait photographers in your community and the going rate is lower than you can sell for, take a good strong look at your competition and what they’re selling. What is their product and what are their circumstances?
Do you offer higher quality photography or services than your competition? Then make it obvious to potential customers. Show them through your identity and by fostering positive word of mouth advertising. A quality logo and website will go a long way toward displaying professionalism.
If your competition already delivers a high quality product at a relatively low price then look at their circumstances. Are they primarily part-time photographers while you operate full-time? If your competition views photography as “extra money” or as a fun way to pay off their equipment then you may not be able to compete on price, plain and simple. This may be a poor market for what you’re trying to do. All the more reason to make your work something special that can be differentiated.
So how do you differentiate yourself? That’s a big topic, worthy of much later discussion. I suggest some marketing ideas in the business e-book PDF download, hopefully it will give you some ideas for increasing the value of your product.
Running a photography business is rewarding, challenging and ever-changing. And I wish this weren’t so but an average photographer with great business skills is more likely to survive than a great photographer with average business skills. If you truly want to become a successful professional photographer, resolve to do the work necessary and continually grow in all areas. Success is there for those that truly desire success and are willing to put the work in.
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6 Responses to “business of photography: when the “going rate” is too low”
Thanks for the eBook. I’ll print it out and read it.
I see you used OpenOffice.org 2.3 to create it. Do you use OpenOffice as the standard office suite at your studio?
By John Brainard on Jul 2, 2008
I noticed a banner for free business cards at the end of the post. Another inexpensive place that I use is http://www.clubflyers.com They have a 48-hour turn around and only charge $30 for 1000 cards. All high gloss 4/4.
By Mike C on Jul 2, 2008
You’re hitting home a lot of valid points in your post. Thank you for sharing.
By Chung Nguyen on Jul 2, 2008
Great article, Jim. Keep em coming.
By Chris Bergman on Jul 2, 2008
Thanks, guys (yo, Chris, whassup!).
John, we’re using MS Office at work because Entourage is our main email client. At home I’m Open Office all the way and would like to switch the studio over at some point. I’m actually tapping this out on a new PC laptop, trying out Vista for the first time (my last 10 computers have all been Macs). No real complaints but a dual-boot Ubuntu is upcoming.
By Jim Talkington on Jul 2, 2008