(Sorry, another long post)
A newspaper article in The Province reports on a new Vancouver-based company that offers customers the chance to save money by booking a last-minute photo session.
The theory is that consumers can save money by booking last minute because photographers will discount their services in order to fill any spare time in their schedule. This company acts as a middleman between the last-minute customer and the not-busy photographer.
At first glance, this might sound like a win-win situation. But a closer look may suggest that it’s a win only for the company behind this. (For fun, check to see who is seemingly behind this).
A last-minute sell-off might be okay for amateur photographers, part-time photographers who have a day job, or those who like to do dump-and-run photography (more on this later). But if you’re a real photographer then this may be a bad idea for you. It’s somewhat similar to why discount sites like Groupon are bad for photographers.
Selling off unsold inventory (e.g. airplane seats, hotel rooms, events tickets, widgets, etc.) is good only when the marginal cost is low.
But a photographer never has unsold inventory. Now you might be thinking that your “extra” time is unsold inventory. But here’s a hint: time can’t be replenished. In fact, the value of your time increases as time goes by. In any case, most photographers don’t sell their time but rather they sell their value (more on this later).
A photographer’s marginal cost is their overhead cost for their next assignment. The cost for your first assignment is extremely high because it includes the cost of all your camera gear, lighting equipment, computers, software, car, and everything else needed to launch your photo business. For many pros, this can be tens of thousands of dollars. But once you have all this stuff, the cost for your next assignment is, in theory, much lower since you already have everything. (Ignore the fact that you may still owe a ton of money).
A photographer’s marginal cost would include ongoing expenses such as insurances, utility bills, repair bills, rent, lease payments, wages, and everything else needed to keep the lights on. Also, I will argue that a photographer’s marginal cost includes themselves unless they’re a commodity (more on this later).
Doing a last-minute photo session for a discounted price doesn’t lower marginal cost. A photographer’s marginal cost is never zero for a fresh assignment. But marginal cost can go down for volume shoots. For example, when doing a large number of business portraits all at the same time and location, the marginal cost for a business headshot can be low. This is exactly why photographers do offer discounts for volume shoots.
For comparison, let’s look at a pro sports event in a 20,000-seat arena. That sports event will happen whether there are 20,000 people in the seats or just 1,000. The total cost to operate the arena and play the game is exactly the same no matter how many people are in the seats. This means that the marginal cost of a game ticket is zero. So it would be smart for a venue to sell unsold seats by discounting last-minute tickets.
A few more things to consider:
• Pricing by the hour makes you a basic wage earner with no recognition of your skill, creativity or experience. It makes you a commodity. But pricing by value means you can be properly compensated.
• The value of my photography doesn’t depend on the day of the week. A portrait that I shoot next month will have the same value to the customer as a last-minute portrait I do tomorrow. Each of these also require the same equipment, same creative effort and same marginal cost. So why should one be discounted?
• So far, I’ve had no problem whatsoever charging more for last-minute jobs (and also for rush jobs). It’s always +50% to +100% because a last-minute job has, in fact, a higher value to the customer. Since many other businesses charge more for last-minute jobs, customers often expect a surcharge. Of course, a photographer doesn’t have to charge more for a last-minute job but there’s no reason to charge less, unless you’re an hourly wage earner with no added value.
• Some photographers think that doing a job for any price is better than nothing. But if you do your normal $500 job for $200 then, by your own numbers, you’re losing $300. How can you afford this? You can afford it if your $500 price is just hogwash and you’ve been overcharging your other customers.
• What if you do a last-minute discount job and that customer comes back later for more photography? They will be expecting the same discount price again. Sure, you can use the excuse that the discount was only for a last-minute booking. The customer will then just book last minute again and you’ll lose again. A low-paying customer always leads to more low-paying customers. Always. A low-paying customer never magically becomes a high-paying customer. Never.
• A discount business like this commodifies photographers. It encourages customers to value photography less and to shop price more. None of this is good for a photographer.
• If you read the company’s terms of service on its web site, you’ll note that all pictures shot during an assignment have to be sent to the company. It’s a dump-and-run for the photographer. The photographer has no edit control and no customer control. When you give up control, you also give up money.
• The terms of service make no mention if a photographer can deal directly with a customer for any future photo sessions. If allowed, it would take money away from the company. If not allowed, then the photographer loses.
• The photographer has to pay the company for editing the photos, pay the company for its services, and pay the company for its marketing. You’re subsidizing someone else’s business. You, the photographer, can do all of this yourself and (a) keep all the money, (b) earn more money from resales, (c) build a relationship with the customer, and (d) build your own brand.
• The company has no skin in the game. If you’re going to “partner” with someone or another business, you need all parties to be fully invested. No skin = no loyalty and no liability. Oh by the way, read the terms of service with regard to liability.
• When, not if, the company wants more money, its options are either to find more customers, raise prices to the customer, or lower the money paid to photographers. Guess which one is easier? (Hint: which option do stock picture agencies always choose?)
• The company does not endorse or guarantee any photographer. The consumer can’t preview or choose the photographer. This should set off consumer alarm bells.
Self-employed photographers really don’t have any down time. Nevertheless, a much better strategy and a more sustainable strategy is to use any down time to attract higher paying customers. That is to say, use your down time to work on your marketing. The reason you have down time is because your current marketing is ineffective.
Sure, if you need a few quick dollars then doing a discounted, last-minute job might be okay. But if it becomes a habit, then that should tell you something about your business.
Assuming you’re planning to stay in business for a while, remember that all the discounted photo jobs you do won’t help your business in the long run. It’s not sustainable nor scalable. If it was, every other photographer would be doing it.
Why not use your down time to shoot your own projects, network with like-minded photographers, take a business course, take a marketing course, learn a new photo skill, start a new business … All of these can help you earn more money and grow your business so you won’t have to do discounted photo jobs.
