This very long and meandering post is intended mostly for new photographers. It outlines some general concepts behind setting a price on one’s photography services.
“We give you your money’s worth, and not a penny more.” – unknown
“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 are running a business. You are supposed to make money by charging more than your costs.
Third rule: Like all businesses, you tell your customers what your services cost, and not the other way around.
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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 or even 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 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 one 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. And if the client pays with cash from their wallet and says don’t bother about a receipt, then you’re charging waaay too low. :-)
In determining photo or creative fees, 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 these fees 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 $1500 for a particular job doesn’t mean Photographer B should, or even could, charge the same.
Unlike an employee, a self-employed photographer must make two profits: both the photographer AND their business have to make money. The business needs a profit to buy new cameras and computers, pay for seminars and conferences, buy new office furniture, etc. The photographer needs a profit (aka. earn a salary) to buy food and clothes, take a vacation, pay household expenses, etc.
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All self-employed business people should know their cost of doing business. At least once, a self-employed photographer should use something like the NPPA’s Cost of Doing Business Calculator, or just a pen and paper to figure out their overhead. A photographer must know where they stand. You can’t go anywhere if you don’t have a starting point. Note that the NPPA web site has lots of other very useful information.
If the cost of doing business is, for example, $190/day, this does not mean that the photographer can’t accept a job for less than this amount, although, that is the concept. It means that for every day worked at $190 or less, the photographer either doesn’t make a cent or loses money. For each day worked below cost, the photographer 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 client, the photographer must have a specific and detailed description of the assignment. There’s no such thing as too much information. With this information in hand, the photographer can then price out the job.
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Don’t work in a vacuum. Talk to other photographers. Know what other photographers are charging for their services. Have a few other photographers on speed-dial 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 setting rates, you will make mistakes. You will undercharge and lose money. You will overcharge and lose business. Learn and move on.
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Pricing third-party expenses, (e.g. equipment rentals, prints, assistants, etc), should be reasonably straightforward. The photographer should inform the client that any expenses listed on the estimate are exactly that – estimates – and that the final invoice will show the final expenses.
All expenses should be marked up by the photographer, as this is a STANDARD BUSINESS PRACTICE done by ALL businesses. It’s one small step towards making a profit.
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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 client to client.
Sorry, but you probably can’t charge for your office time for doing such things as estimating, invoicing, accounting, answering phone calls from the client, working on your web site, etc.
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 higher cost of doing business might require a photographer to price their non-photo services 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.
For example: Photographer-A might charge $30 to burn images onto a disc for a client. But Photographer-B, who includes a PDF contact sheet or HTML gallery on a gold archival or Lightscribe disc, might charge $55 per disc.
Clients will usually pay more if they believe they’re getting more value. But remember that value is subjective and is relative to the client.
Here’s a link to a previous post about adding value.
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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, clients 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?”
If they sold cars by the pound, a Porsche would be cheaper than a minivan. In fact, by the pound, a Porsche can be much cheaper than some cameras! Another reason why you must charge appropriately for your expensive overhead.
If a photographer charges by the hour, then an experienced photographer, who can do the assignment faster, would get paid less than an inexperienced photographer. Although, an experienced photographer would probably have a higher hourly rate than a lesser-experienced photographer, (good luck explaining that to the client).
If a photographer charges by the hour, then it’s to their advantage to work as slow as possible, while at the same time, it’s to the client’s benefit to yell, “faster faster.”
If a photographer charges by the hour, it encourages the client to shop price.
If a photographer charges by the hour, it can compensate them for any delays caused by the client or by any other factor.
If a photographer charges by the hour, there’s no difference between a headshot that’s used only on a business card versus a headshot that’s used in an annual report AND in a brochure AND in a magazine advertisement AND on a web site. If photo usage goes up then obviously that photo has more value.
More value to the client = more money for the photographer.
If a photographer charges by the hour, then that one hourly rate has to apply to everything they shoot. Otherwise, the photographer will have a tough time explaining to a confused client why a PR event is $150/hour, a studio product shoot is $250/hour, and an executive headshot is $350/hour.
If the photographer has changing hourly rates, it might be easier to charge by the assignment type and usage, as it’s less confusing for all concerned.
Say a photographer charges Client X $200/hour. If Client X should ever refer the photographer to Client Y, then this new client will also be expecting the same $200/hour, no matter what the assignment. And, if Client Y refers the photographer to Client Z, then this new business will also be expecting the same $200/hour.
The point is, with a fixed fee per hour, a photographer may be stuck at whatever original rate the first client received. Otherwise, the photographer may have a difficult time explaining why their hourly fee changes for each client.
However, some photographers do quote by the hour, but with a minimum, such as: “that will cost a minimum $200/hour”, or “that will be $200/hour with a two hour minimum”. But be warned that often in a case like this, the client will hear only “$200″.
If a photographer charges by the day, it’s to the client’s advantage to pack in as many photo requests or assignments as possible. This is how many newspapers operate. In a day-rate situation, the photographer will be working more but not getting paid more.
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 $1800, 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.”
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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.
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 client with more value, or at least gave the perception of more value. Or to phrase it another way: most clients associate a low price with a low value.
Did anyone mention: Never give a price over the phone or off the top of your head?
There will be many impatient clients who will ask for “just a ballpark number”. The photographer will rarely know all the details of the assignment and yet, the client 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 dollar range. In all cases, no matter what the photographer says, the client 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 $2000.”
As far as the client is concerned, the photographer just said they could do the job for $500. Of course, the client 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 much more, the client will wonder why the photographer is trying to jack-up the price from the “original” $500. The client might think the photographer is either trying a bait-and-switch tactic or that the photographer doesn’t really know what they’re doing.
A photographer who pulls a price out of thin air will always regret it.
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A photographer needs have to have a personal set of pricing guidelines to help determine the photo fees. These guidelines come from experience and from being aware of other photographers’ and agencies’ prices. 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 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 much over the years. But the sad reality is that market prices for photography haven’t changed over the last several years. The prices used in the software are based on some type of survey of photographers, picture agencies, and web sites. There’s no mention as to the sample size used.
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.
A photographer should keep all estimates and invoices, and use those numbers to build their own price guidelines.
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, “That job will cost $1200″ in a confident voice, rather than, “I was thinking of maybe charging around $1200, if that’s okay?”
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One way to start formulating photo fee guidelines:
Know your cost of doing business. (This is not an option)
Determine what income you’d realistically like to earn before taxes. (Yes, we’d all like to make a million dollars while working only one day per year.)
I read that the average Canadian adult makes about $45,000 per year. I also read that the average self-employed artist earns half that.
Say, you want to earn $50,000/year (before taxes) and your cost of doing business is about $20,000/year. Right away, 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 work only 100 days. But let’s be very, very optimistic and say you’ll work 240 days. (365 days – 104 weekend days – 14 days vacation – 7 sick days = 240).
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 need to charge more or else you won’t meet your expectations.
But wait. What about time to work on your business itself? Bookkeeping, marketing, web site, running errands, phone calls and e-mails, doing invoicing and estimating, etc.
Budget at least one day per week for office work. Remember that you do NOT get paid for these days.
So now your minimum fee is $410/day for 188 days, (assuming you’ll get 188 days of work.)
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.
But here’s Deal #1:
For each low-paying job you do, you’ll have to compensate by doing a higher-paying job so that you can meet your financial expectations. But for each higher-paying job you do, the less time you’ll have for a low-paying job.
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.
Example: A wedding photographer who charges a bride $1000, will be recommended by that bride to other couples who also want $1000 wedding photos. But the photographer who charges $6000 will be referred to other brides who can also afford $6000.
Deal #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 1990s study by McKinsey & Company showed that a 1% increase in price can boost profits by 11%.
If you raise the price, customers assume something has been improved and they are getting more. But if you lower the 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 pictures.
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 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 just by arriving at assignments in his Mercedes and always wearing a suit and tie. He looked successful => he must be good => he must be worth the price.
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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 do not “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. The final ad ran across the country, including full-page ads in a national newspaper.
The photographer later complained 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 was totally embarrassed and humiliated, and couldn’t wait to get out of the office.
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Quoting high:
Some photographers will purposely quote high and, if necessary, let the client 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 client.
There are arguments for both strategies.
For a photographer who always quotes high, their repeat clients will always expect a discount, and perhaps even a bigger discount than last time. This photographer’s “suggested list price” won’t have much meaning. However, this can be a good thing if the client expects (or is expected) to negotiate. But clients who don’t negotiate may be scared away by the high price.
For a photographer who quotes their normal price upfront, negotiations, if any, with a client should revolve mainly around usage rights or photography requested, and not around the photo fees.
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Quoting low:
“We lose money on every sale, but we make up for it with volume!” – unknown
There is 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 client, they can raise their prices back up to the “normal” level. This will never happen. The low price a photographer charges for a job is what the client will expect again and again. Once any business cuts 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 a 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 $2200 and got the job. To be honest, the other photographer could have easily produced the same or better photos than I did.
The 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.
Undercutting can hurt other photographers and clients:
I was once asked to quote on a PR 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.
The PR company was unable to find any photographer who would do the job for $200. The PR person told me that she knew $200 sounded too low, but the book publisher refused to go higher than their “normal” price.
So, I lost that job and the book publisher lost coverage of their event because another photographer had conditioned the client to expect a ridiculously low fee.
Undercutting photographers can hurt themselves and their clients:
A few years ago, a Toronto photographer shot a commercial job for a national TV network. The job was a series of portraits that were used on billboards across the country, transit ads in several cities, and full-page ads in a large national magazine. The pictures ran for six(?) months. The job took two full days to shoot, plus several more days for preparation and editing.
She charged $2000, plus $700 for her assistant, plus film expenses.
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 probably suffer from this, but not to this extent.)
The client, whom I later met, asked if the original job could’ve been shot on digital, which would have saved them time and money. The client said the original photographer didn’t have a digital camera, so they shot film, waited for film processing, and then sent it all out for scanning, which meant more waiting and more expenses.
This photographer, who was charging too low, couldn’t afford to get into digital photography, so her client suffered by paying more in time and money.
Very low pricing only shoots the photographer in their own foot and wallet.
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This is mostly part of negotiating, but it still applies to pricing: Clients who pay more, expect more. But clients who pay less, don’t expect less.
Many clients assume a photo is a photo is a photo, and that it’s the camera that does all the work. These people will expect the same quality of photography and same level of service no matter how low they pay.
Say your initial quote is $2500 and the client offers $1000. If you readily agree, then it means you’re doing a $2500 job for $1000. You’ve lost $1500 before the job has even started. And, the client is still expecting $2500 worth of photography.
Competing on price:
Competing 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 a downhill race. It’s only about how much you’re willing to lose. First one to the bottom “wins”. We see this now with stock agencies competing with each other to sell pictures cheaper and cheaper.
If you “win” the race to the bottom, then you’ve secured your place at the bottom. But if you “lose” the race to the top, you’ve secured your place somewhere in the middle. Take your pick.
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.
Relationships with customers are more important than photographic ability, (unless, of course, your photography really stinks).
**Edit: Sept. 9: If you’ve read this far, there is a related thread on NPAC’s forum that may be of interest.
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Just FYI:
Editorial Photographers’ Editorial Estimator has information on a large number of American publications. It seems to use data from 2001. The site has lots of other good information.
Editorial Photographers Canada has similar information.
Stock Price Calculator may be of some use, although no idea when or how this data was collected.
A five-part video series by photographer Rick Rickman on the business of photography. Note that parts 3 to 5 refer to US copyright law only.
The Association of Photographers in the UK has some Business Documents which may be useful for informational purposes.
The National Union of Journalists in the UK has a Freelance Fees Guide. Very important to remember that this site is intended primarily for photographers working in the UK market.
FreelanceSwitch has an online calculator to help you figure out what your minimum hourly rates should be, based on your cost of doing business.
