Beginner’s Guide To Pricing Photography

This very long and meandering post is intended for new photographers. It outlines some general concepts behind setting a price on photography services.

 

Money is better than poverty, if only for financial reasons.

– Woody Allen

 

First rule: Never give a price over the phone or off the top of your head.

Second rule: You’re running a business. You’re supposed to make money by charging more than your costs.

Third rule: Like all businesses, you tell your customers what your services cost, not the other way around.

Fourth rule: Never base your prices on Cost + Profit Margin. Always base your prices on value to the customer. Charge for what you know, not for what you do.

 

Sidenote: I use the words “price” and “fee” interchangeably in this article. But “price” is normally associated with the sale of tangible goods and “fee” is usually the amount paid for a service.

The word “fee” sort-of implies that it’s non-negotiable whereas “price” is often assumed to be variable. For this reason, some photographers will say that it’s advantageous to use “fee” rather than “price” in a quote, invoice or other paperwork.

The word “cost” might also imply non-negotiable. The cost of a loaf of bread, the cost of gasoline, the cost of inflation, the cost of living, etc. These all sound like fixed amounts that can’t be negotiated.

When you charge expenses to a customer, it’s better to list them as costs and definitely not as prices or fees. Parking cost, travel cost, permit cost, rental cost, etc. “Cost” makes it sound a bit more “carved in stone.”

 

Profit is Essential

Just because a photographer loves what they do, that doesn’t mean a price can’t be put on their work. It’s not illegal nor unreasonable for a business to make a profit.

If a photographer respects their work and their business then a fair price must be charged. It’s important to remember that a fair price isn’t always the lowest price.

It’s been said that all clocks can tell the time but no two will agree. Similarly every photographer will have a different price for the same job.

The right price is that which gets the photographer the job and earns them a profit. The wrong price is that which gets the job but no profit.

If a photographer gets every job they quote then that’s a good sign they’re charging too low. If the customer pays with cash from their wallet and says not to bother with a receipt, then the photographer is charging waaay too low. :-)

In determining a photo or creative fee, a photographer must decide what amount of money will adequately compensate them for their time, talents and overhead as well as for the value of the photographs produced. For better or worse, there is no exact formula to determining what this fee should be.

What a photographer charges for their work is something that they will have to determine based on their market, their overhead and their expectations of profit. Just because Photographer A charges $1,500 for a particular job, that doesn’t mean Photographer B should, or even could, charge the same fee.

Unlike an employee, a self-employed photographer must make two profits: both the photographer and their business must each make money. The business needs a profit to buy new cameras, computers, office supplies, etc. The photographer needs a profit to buy food and clothes, take a vacation, pay household expenses, etc.

 

Know Your Starting Point

All self-employed business people should know their cost of doing business. At least once, a self-employed photographer should use a Cost of Doing Business Calculator, or just a pen and paper, to figure out their overhead. This is not an option. A photographer must know where they stand. You can’t go anywhere if you don’t have a starting point.

If your cost of doing business is, for example, $600/day, this doesn’t mean that you can’t accept a job for less than this amount, although that is the goal. It means that for every day worked at $600 or less, you either don’t make a cent or you lose money. For each day worked below cost, you must work another day at a much higher rate to compensate. Otherwise it becomes one step forward and two steps back.

Before an estimate can be sent to a customer, you must have a specific and detailed description of the proposed assignment. There’s no such thing as too much information. Only with this information in hand can you price the job.

 

Check With Other Photographers

Don’t work in a vacuum. Talk to other photographers. Know what other photographers are charging for their services but do not copy them. Each photographer’s business is different – different overhead and different expectations. One photographer’s prices may not suit another photographer.

Have a few other photographers on speed-dial (okay, maybe use e-mail) so that you can bounce numbers off them. Fellow photographers won’t be as emotionally attached to a potential job and should be able to offer some clear-headed advice. Please note that it isn’t particularly legal for photographers to get together to “fix” prices.

When giving quotes, you will make mistakes. You will undercharge and lose money. You will overcharge and lose business. Learn and move on.

 

Job Expenses

Pricing expenses, (e.g. equipment rentals, prints, consumables, assistants, etc.), should be reasonably straightforward. The photographer should inform the customer that any expenses listed on the estimate are exactly that – estimates – and that the final invoice will show final expenses.

Expenses should be marked up by the photographer as this is a standard business practice done by all businesses. It’s one small step toward making a profit. There is no legal requirement for you to give receipts to a customer.

Expenses should not be negotiable. Otherwise the photographer ends up subsidizing the customer’s photography project.

 

Other Expenses

A photographer should create their own price list for their standard set of non-photography services such as: burning a CD/DVD, contact sheets, web gallery for online proofs, post-processing, mileage, and any other repetitive or routine tasks. Consistency here is fairly important and these prices probably won’t vary from customer to customer.

Prices for these fixed services can be determined by considering what other photography businesses in the area charge for the same or similar services. But having a lower/higher cost of doing business might require a photographer to price their fixed services lower/higher than other photographers.

 

Price is what you pay. Value is what you get.

– Warren Buffett

 

By adding value to any service, a photographer can justify having higher prices.

Example: Photographer A might charge $30 to burn images onto a disc for a customer. But Photographer B, who includes a PDF contact sheet or HTML gallery on a gold archival disc might charge $50 per disc.

Customers will usually pay more if they believe they’re getting more value. But remember that value is subjective and it’s relative to the customer.

Here’s a link to a previous post about adding value.

 

Charging By The Hour

Most photographers do not charge by the hour except perhaps for some event-type jobs and for overtime rates. Instead they charge by the assignment and/or by the usage. However customers will always ask, “What do you charge per hour?” or “What’s your day rate?”

Does anyone ever ask a car dealer, “What do you charge per pound of car?”

If they sold cars by the pound, a Porsche would be cheaper than a minivan. In fact, by the pound, a Porsche can be cheaper than some cameras!

• If a photographer charges by the hour then an experienced photographer, who can do an assignment faster, would get paid less than an inexperienced photographer.

 

• If a photographer charges by the hour then it’s to their advantage to work as slowly as possible. At the same time, it’s to the customer’s benefit to yell, “Faster, faster!”

 

• If a photographer charges by the hour then that encourages customers to shop price rather than shopping experience or creativity.

 

• If a photographer charges by the hour, then there’s no difference between a headshot used only on a business card and a headshot that’s used in an annual report and in a brochure and in a magazine advertisement and on a web site.

Remember that if photo usage goes up then that photo has more value. More value to the customer should mean more money for the photographer. But if a photographer charges by the hour, the photographer won’t benefit from any increased usage or value.

 

• If a photographer charges by the hour then that hourly rate has to apply to everything they shoot. Otherwise the photographer will have a tough time explaining to a confused customer why a PR event is $150/hour, a studio product shoot is $250/hour and an executive headshot is $350/hour.

If a photographer has variable hourly rates, it might be easier to charge by the assignment type and usage since it will be less confusing for the customer.

 

• Let’s say a photographer charges Client-X $200/hour. If Client-X should refer the photographer to Client-Y, then Client-Y will be expecting the same $200/hour no matter what the assignment.

This photographer may be stuck at whatever hourly rate the first client received. Otherwise the photographer may have a difficult time explaining why their hourly fee is different for each customer.

 

• If a photographer charges by the hour then the only way to earn more is to either work more or raise their hourly fee. But neither is easy. Also, it may not even be possible to work more because there are only 24 hours in a day.

 

Some photographers do quote by the hour but with a minimum such as, “That will be $200/hour with a three-hour minimum.” But be warned that the customer may only hear “$200.”

If a photographer charges by the day, then it’s to the customer’s advantage to pack in as many photo requests as possible during that day. “While we’ve got you here, we also need pictures of . . .”

In a day-rate situation, a photographer can be asked to work more without getting paid more. This is why some photographers will include a limit with their day rate. For example, $1,800/day with a maximum of four setups, or $1,800 per day with a maximum of ten images.

 

In case you missed it:

It’s never to your advantage to charge by time. You are not selling time. No one can sell time. Customers do not, and cannot, buy time. Customers buy an outcome, they buy an end result. So it’s better to price for that end result which means charging for usage or for value.

 

Charging By Usage

Another pricing strategy is to base the photography fee on photo usage, while factoring in the photographer’s overhead, talent and effort. But a problem might arise when the intended photo usage is very small and the necessary photography service is large.

Another alternative, perhaps a hybrid of the other pricing strategies, is to quote per job and/or usage but with a set work time. For example, a photographer might say:

“That job and usage will cost $1,800 based upon a maximum of four hours of photography. If the photography takes more than four hours, the extra hours will be billed at an additional $250 per each hour.”

 

Charging By Value

Determining the photo or creative fee can be complicated as there are no standard fees for anything. Pricing is not an exact science. Most photo assignments are different with different photography requirements and different photo usage.

Customers buy when the perceived value to them is higher than the cost.

Two photographers can shoot the exact same photo, yet one photographer may be paid much more than the other. One reason is that the expensive photographer somehow provided the customer with more value or at least gave the perception of more value. To phrase it another way: most customers associate low price with low value.

Everyone knows that cheap things aren’t good and good things aren’t cheap.

Also remember that a job’s value to a photographer is usually very different from the job’s value to the customer. Never assume that the customer sees the needed photography the same way as you. The customer’s perception is almost always much higher than the photographer’s.

For example, annual report photos are worth a lot more to a company trying to enhance its reputation and build brand awareness than to the photographer shooting those pictures. So this photographer should not think that, because a day is worth $1,500 to them, they should charge the customer $1,500. To that company, those annual report pictures or, to be more exact, the goal of those annual report photos might be worth tens of thousands of dollars.

The customer isn’t really buying photography, they’re buying an end result. How much is that end result worth to the customer? Or to rephrase it, how much value will your photos provide to the customer?

 

Never ad-lib a Price

Did anyone mention that you should never give a price over the phone or off the top of your head?

There will be many impatient customers who will ask for “just a ballpark number.” The photographer will rarely know all the details of the assignment and yet the customer will ask, “What do you charge for . . . ?”

Not wanting to lose any business, the photographer may panic and quote either a low price range or give a very wide range. In all cases, no matter what the photographer said, the customer will hear and remember only the bottom-end number. That’s human nature.

Photographer: “Well it really depends on the job and the usage rights. But maybe, and this is only a ballpark guess, but maybe anywhere from $500 to $2,000.”

As far as the customer is concerned, the photographer just said they could do the job for $500. Of course, the customer didn’t hear anything about copyright, usage rights, payment terms, etc.

In case you missed it: Never give a price over the phone or off the top of your head.

If this photographer later discovers that the job will cost more, the customer will wonder why the photographer is trying to raise the price from the “original” $500. The customer might think the photographer is either trying a bait-and-switch tactic or the photographer doesn’t really know what they’re doing. Or maybe the customer will sue for breach of contract.

A photographer who pulls a price out of thin air will always regret it.

 

Pricing Software

A photographer needs have to have a personal set of pricing guidelines to help determine their photo fees. These guidelines come from experience and from being aware of prices from other photographers and agencies. But be very careful with copying price lists found online. Don’t follow other people’s prices blindly. Allow for your location, your market, your competence level, your overhead and your business expectations.

There is pricing software such as fotoQuote Pro which has *suggested* prices for a wide variety of photo usages. This can be helpful as long as the photographer also factors in their market conditions and their business needs.

Note that the prices used in fotoQuote don’t appear to have changed over the years. The sad reality is that market prices for photography haven’t changed much over the last decade or two. The prices used in this software are based on some type of survey of photographers, picture agencies and web sites. But there’s no mention as to the accuracy, survey size or when any survey was done. Some of the prices date back to at least 2004.

 

Your Own Prices

Keep all your estimates, whether you got the job or not, and all your invoices. Use the numbers from these to build your own price guidelines.

Approximate photo fees for certain types of photography should be written down and not left to memory. Be prepared ahead of time as much as possible.

Believe in the value of your photography and in your prices. Your belief in your worth is infectious. If you believe then so will they.

Learn to say in a confident voice, “That job will cost $2,500.”

Never say, “I was thinking of maybe charging around $2,500 if that’s okay with you?”

Never apologize for your prices.

Never say, “I hate to tell you this but the price is . . .” or “I’m afraid that’s going to cost . . .”

Contrary to popular belief, price is not the main motivator for a purchasing decision. It’s not. The service that the photographer is providing is the most important factor. Play up your service and your experience and not the price.

A customer will not hire a low-priced photographer if they think it will be too much of a risk. Risk avoidance is a major motivator. Show the customer that hiring you is the low-risk solution to their photography needs.

 

Starting Your Pricing Guidelines

How to start your pricing guidelines:

We give you your money’s worth and not a penny more.

– Unknown

Know your cost of doing business. This is mandatory!

Determine what income you’d realistically like to earn before taxes. (Yes, we all want to make a million dollars while working only one day per year.)

Statistics Canada (2010) has reported that the average Canadian adult earns about $45,000 per year. It also said that the average self-employed photographer earns about half that amount.

Let’s say you want to earn $50,000/year (before taxes) and your cost of doing business is about $20,000/year. Right away, this means you must bill $70,000/year, not including expenses, to meet your expectations.

How many days per year will you work? Sure, you might be available to work 365 days per year but you might actually be photographing assignments only 100 days per year. But let’s be very, very optimistic and say you’ll be shooting 240 days. (365 days – 104 weekend days – 14 vacation days – 7 sick days = 240 days).

Do the math: $70,000/240 = $292/day is the minimum fee you should charge.

But wait. At that rate and with that number of days, you might earn your $50,000 but your business itself doesn’t earn a cent. Let’s give your business a basic 10% gross profit.

Your minimum is now $321/day for 240 days. If you fall short on your 240-day quota – and you will – then you’ll need to charge more or else you won’t meet your income expectations.

But wait again. What about time to work on your business itself? Bookkeeping, marketing, web site, running errands, phone calls and e-mails, invoicing, estimating, etc.

Budget at least one day per week for office work. Remember that you do not get paid for these office days.

So now your minimum fee is $410/day for 188 shooting days.  (240 days – 52 office days = 188 days)

If you need more than $50,000/year (before taxes) because you live in an expensive city, have kids, want to put money into a retirement fund, get health insurances, go on exotic vacations, have a savings account, upgrade existing equipment, buy new equipment, and so on, then you’ll need to increase your minimum rate even more.

Obviously it’s not possible to continually raise your rates whenever the need arises. Market conditions and competition will usually keep your fees down.

Every type of photography has a price ceiling that’s set by your market. For example, routine business headshots in Toronto max out at about $500 per person. High-end executive portraits go up to about $2,000 per person. The ceiling for corporate events is about $3,000 per day. Your goal is to be at the maximum price for your type of photography

 

Secret #1:

For each low-paying job you do, you’ll have to compensate by doing a higher-paying job later so that you can meet your income expectations. But for each higher-paying job you do, the less need you’ll have for low-paying jobs.

Higher-paying jobs earn you more money (obviously) but the more higher-paying jobs you do, the less likely you will chase low-paying work.

Or to rephrase: higher-paying jobs tend to lead to other higher-paying jobs. Lower-paying jobs lead to more lower-paying jobs.

For example: A $1,000 wedding photographer will be recommended by the bride to her bride-to-be girlfriends, all of whom will be expecting $1,000 wedding photos. But a $7,000 photographer will be referred to other brides-to-be who will be expecting $7,000 wedding photos.

 

Secret #2:

A good way to increase sales is to . . . raise prices.

There’s actually a name for this economic principle but it escapes me right now. A 1992 study (link to pdf) by Michael Marn and Robert Rosiello, of McKinsey & Company, showed that a 1% increase in price can boost profits by 11%.

If you raise your price, customers assume something has been improved or they’re getting more. But if you lower your price, customers assume something is wrong or something was reduced.

This will not work where “good enough” is the customer’s thinking, such as with a commodity service like passport photography.

Higher prices can increase the perceived value of your services.

It should be obvious that you can’t just hike your prices as high as possible and expect business to flood in. A higher price suggests a higher quality product and/or a more upscale service. So you would need to meet a certain level of expectation.

There was a photographer here in Toronto who met his customers’ upscale expectations simply by arriving at assignments in his Mercedes and always wearing a suit and tie. He looked successful, so he must be good, so he must be worth the price.

 

Start Right

The level at which a photographer begins a business relationship with a client is the level at which they will usually stay.

A cheap photographer will always be known as “the cheap photographer” and will get only the cheap jobs. The “good” photographer (i.e. the more expensive shooter) will get the premium jobs.

Low-paying jobs never “graduate” into higher-paying jobs.

A photographer I know was very excited to get called by an ad agency looking for a quote to shoot part of a bank’s national ad campaign. The photographer quickly quoted $800 because $100/hr X 8 hours sounded good to her.

The finished advertisement with her work was published across the country including full-page ads in a national newspaper.

The photographer later told me that she felt sick to her stomach over that job because she was taken advantage of, by herself! Her own anxiety, excitement and fear caused her to bid low. She knew she cheated herself.

And there’s more.

Later, the same ad agency called the photographer into their office so that she could be introduced to other photo buyers. The photographer was led around the office and repeatedly introduced as, “This is (photographer’s name). If you need a photographer, she’s cheap!”

Not once did the agency person say, “She’s talented”, “She does good pictures” or “She’s great to work with.” It was always, “She’s cheap!”

The photographer said she felt totally humiliated and couldn’t wait to get out of the office.

 

Quoting High

Some photographers will purposely quote high and, if necessary, let the customer talk them down to their “normal” fee. Other photographers will quote their normal price upfront and then stick with that number when negotiating with the customer.

There are arguments for both strategies.

When a photographer always quotes high and lets the customer talk them down, repeat customers will always expect a discount and perhaps even a bigger discount than previous time. This photographer’s “suggested list price” won’t have much meaning.

This could be a good thing if the customer expects (or is expected) to negotiate. But customers who don’t negotiate may be scared away by an initial high price.

For a photographer who quotes their normal price upfront, negotiations, if any, should revolve mainly around usage rights or the amount of photography requested and not directly around the photo fee.

 

Quoting Low

We lose money on every sale but we make up for it with volume!

– Unknown

There’s a difference between charging less and undercutting.

A photographer with a low overhead can charge less. But a photographer who charges below their own costs is either undercutting or foolish, or both.

A photographer might decide to quote a very low price to help get their foot in the door. Their thought is that after they get in with the customer, they can raise their prices back up to the “normal” level. This will never happen.

The level at which a photographer begins a business relationship with a client is the level at which they will usually stay.

The low price a photographer charges for the first job is what the customer will expect again and again. Once a business (a photographer) lowers prices, it’s always difficult to raise them back up.

Working below cost or without profit means the photographer will literally work themselves out of business.

 

People always associate low price with low quality:

• Another photographer and I each bid on the same job for a trade magazine. We know each other and we talked about this job later.

He bid $400 because his plan was to bid low to get the job and then, hopefully, the client would throw more work his way. I bid $2,200 and got the job. To be honest, the other photographer could have easily produced the same or better photos than I did.

The magazine client actually told me that the other photographer bid much too low and they refused to hire him just for that. They thought that since his price was so low, something must be wrong.

 

• I know the director of photography for a large national newspaper who said he will never hire a photographer who offers to do a job for free. He gets such offers frequently from photographers trying to get their foot in the door. He said that if they’re willing to work for free then they don’t know what they’re doing.

 

Undercutting

Undercutting can hurt other photographers and customers:

• I was once asked to quote on a public relations job for a book publisher because their regular photographer wasn’t available. I quoted $525 to shoot a short press conference with one picture getting released as a media handout.

They said their usual photographer charges only $200 and that included all expenses, all copyrights and even proof prints of everything. So my $525 with limited rights got rejected.

In the end, the publisher was unable to find any photographer who would do the job for $200. The publisher’s own public relations person told me that she knew $200 was too low but the book publisher refused to go higher than the “normal” price of $200.

So I lost that job and the book publisher lost coverage of their event because another photographer had conditioned the customer to expect a ridiculously low fee.

 

Undercutting photographers can hurt themselves and their customers:

• A few years ago in 2004, a Toronto photographer had a commercial job for a national TV network. It was a series of portraits of on-air news personalities that were to be used on billboards across the country, on transit ads in several cities, and in full-page ads in a national news magazine. The ad campaign was to run six months. The job was budgeted for three full days of photography plus several more days for preparation and editing.

The photographer charged $2,000, plus $700 for her assistant, plus film expenses. She intentionally quoted low to get the job. I know all this because she got a higher paying job elsewhere and she asked me to take over this $2,000 job for her.

I would have had to charge her quoted rate of $2,000, use her assistant, and shoot 120-format transparency because that’s what she told the customer would happen.

I turned down the job because she had quoted much too low. It should have been five times higher and maybe even ten times higher.

A few months later, she called me and in the course of conversation, she complained that she couldn’t afford to get her old Nikon F4 repaired. She couldn’t afford to run her business properly because she wasn’t making enough money. (Yes we all suffer from this but not to this extent.)

The TV network customer, whom I later met on an unrelated job for the same TV network, asked if the original job could’ve been shot on a digital camera which would have saved them time and money. At the time, I was using a digital camera to do portraits of the network’s sports channel on-air hosts. My image turnaround was same day with no processing, no scanning and no courier fees.

The customer said the original photographer didn’t have a digital camera so they shot film, waited for processing and then sent it all out for scanning and more waiting.

This photographer, who was charging too low, couldn’t afford to get into digital photography so her customer suffered by paying more in time and money.

Very low pricing and undercutting shoots the photographer in their own wallet.

 

Quoting in Threes

Almost every business offers a range of products in a range of prices hoping to satisfy every customer. But most photographers quote one price for a particular job. Wedding photographers are the exception as they offer a variety of packages at various prices.

When a commercial photographer quotes a single price, most customers will see that as a take-it-or-leave-it price because few customers want to haggle.

The alternative to a single price is to offer three prices. Three is a magic number.

 

Customer Expectation

Customers who pay more, expect more. But customers who pay less, don’t expect less.

Many customers assume a photo is a photo is a photo and it’s the camera that does all the work. These people expect the same quality of photography and same level of service no matter how little they pay.

Say your initial quote is $2,500 and the customer counter-offers with $1,000. If you readily agree to the lower fee then it means you’re doing a $2,500 job for $1,000. You’ve lost $1,500 before the job has even started. And the customer is still expecting your $2,500 worth of photography.

 

Price the customer not the work

This does not mean you should gouge customers nor does it mean you should automatically raise prices for bigger or wealthier customers. It means that you price for the customer’s intended use of the photos or for the intended goal. A big company with big plans should be charged more than a one-person business with small plans.

Buying a paperback novel might cost you $20. But if you want to turn that novel into a movie, it will cost you a lot more to buy the movie rights. To properly price a certain photo job for a customer, you need to know the use. A big use, such as making a movie from a book, should be priced higher than a small use, such as reading the book in your livingroom.

 

Spot Quiz: What do you charge for a portrait of someone? Can you determine a price based only on a job description of “we want a nice portrait”?

Case 1: The portrait is for someone’s social media profile photo. They just graduated from college and want the portrait on LinkedIn to help them get a job.

Case 2: The portrait is for someone running for political office. The photo will be used on their web site, social media, lawn signs, brochures and maybe a few transit ads. They need the picture to show they’re honest and trustworthy because the portrait will be the face that the voting public sees.

Case 3: The portrait is for an author whose upcoming book is their first in a new genre of writing. They’ve switched from historical romance novels to murder-mystery novels. The author is launching a new web site where they hope to rebrand themselves and shed their dusty, historical persona for something more fun and exciting.

For all of the above three cases, the work is more or less the same. Do you charge the same fee?

A smart photographer will recognize that the portrait has a different value to each customer and so it should be priced differently.

Price for the customer and not for you to do the work.

 

Price for what you know, not what you do

Anyone can push a camera shutter button but only you know what you know. Market yourself as a photography expert, not a camera operator, because experts always get paid more.

 

Competing On Price

Competing with other photographers on price means you set your fees based on fear. If you don’t go low enough, you’ll lose the job. Fear isn’t the best way to run a business.

If your photo business competes only on price then it’s always a downhill race. It’s about how much money you’re willing to lose. First one to the bottom “wins.” We see this today with stock photo agencies competing with each other to sell pictures cheaper and cheaper.

Remember, if you can’t lower your costs then you can’t lower your prices.

If you win the downhill race then you’ve secured your place at the bottom. But if you lose the race to the top, then you’ve secured a place somewhere in the middle.

Customers will shop price if they have no other way of differentiating you from other photographers. If your potential customers are shopping price then it means you failed. You failed to distinguish yourself from the others so you’ve no choice but to compete on price which then means you’re telling customers to shop price.

You can never win by competing on price alone. But you can win by competing on customer service and, of course, by producing good photography. Notice I didn’t say “great” photography, although that would be a definite bonus. You just have to be consistently good.

Customers think with their eyes and shop with their emotions. They need to trust you and feel good about you before they will hire you. You have to be the lowest risk option for them.

Relationships with customers are more important than your photographic ability, unless your photography really stinks. This relationship starts the first moment they visit your web site. Do you look like you’re worth your price?

 

Percentages

Most businesses are lucky to make a 10% net profit. There are a few companies that make more than that and there are also many companies that make much less.

Each time you get paid, all that money does not go into your pocket. Suggested targets for this money are (approximately):

• 15% for business taxes if you are incorporated.

• 30% for business overhead. This can vary depending on how your business is run. You always want your overhead to be as low as possible so you must keep an eye on all your expenses.

• 5% business profit. Yes this is a small number but it’s quite realistic. You want this to be as high as possible but most businesses are lucky to make even 10% profit. Your business profit is used to buy new cameras, new lenses, new computers, etc. If you don’t have any profit then your business can’t afford to buy anything.

• 50% for your salary. You have to pay yourself otherwise you’re working for free. Your business revenue will change from year to year so your income will also change from year to year. This money is used to buy your food and clothes, pay for rent, household expenses and vacations, pay income tax (maybe 20% tax rate but it varies from province to province) and Canada Pension Plan, put money into personal savings,etc. If you use your salary to support your business, and sometimes you may have to, then you will have less money for yourself.

If you do a lot of low-paying jobs, you won’t be able to meet your percentage targets. Specifically, you may find that all your money goes only to business overhead and taxes. There will be little left for you or your business.

Many photographers work as a sole proprietor and they don’t actually pay themselves and their businesses don’t formally earn a profit. Instead, these photographers just keep whatever money is leftover after all expenses and taxes are paid. If you’re lucky, this might work out okay. But you really should aim toward being more organized and more structured. If you do this, you can track your numbers and see exactly how your business and your pricing are performing.

 

Just FYI

• The average Canadian hourly wage as of June 2015 was $25/hr. In Toronto, an average family of four needs to earn a total of at least $37.00/hour (about $1400/week) just to scrape by.

 

• As of December 2014, the average annual Canadian salary was about $49,000 before deductions.

 

• The Editorial Photography Estimator has information on a large number of US publications. It seems to use 2001 data but it still should provide some insight.

 

• The Canadian Artists Representation Copyright Collective has a suggested minimum fee schedule. It’s very important to note that these minimum fees are for licensing only and not for assignment work. This fee schedule is not for commercial photographers but it might offer a starting point for photographers.

 

• The National Union of Journalists in the UK has a Freelance Fees Guide. Very important to remember that this site is intended for photographers in the UK market.

 

• The Association of Photographers (AOP) in the UK has an online usage calculator to help photographers determine a suitable fee. It’s important to understand how this UK calculator works: it’s based on a BUR system (Base Usage Rate). The AOP site also has some other useful information.

 

• A British food photographer has a video on pricing food photography and it includes an example of using the BUR calculator. However note that he says customers are not paying those rates and he drops the BUR licensing fee by 33%.

 

• D-65 is web site by well-known US photographer Seth Resnick. The site has general numbers for *his* stock photography pricing.

 

• A video explaining the basic concepts of how to price photography.

 

• 2017 editorial rates for six of the top US news outlets.

 

• I have a few more blog posts specifically on pricing.