business practices

Photography pricing resources

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Just a short list of a few resources for learning to price commercial photography. I’m not vouching for any of these. A photographer would be foolish to base their business practices on numbers from someone else’s web site. Use these for informational purposes and to help understand the underlying principles.

• The News Photographers Association of Canada Cost of Doing Business Calculator (CODB) is a good place to start. You may be quite surprised at what your CODB is.

• The Canadian Association of Professional Image Creators has a PDF listing suggested minimum usage fees (i.e. licensing fees only). Main page > Useful Resources > Resources > Reproduction Fee Schedule. The site has other useful information.

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Should you adjust your set?

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The photo assignment has been completed and the finished pictures and invoice have been sent to the customer. But for whatever reason, the customer’s plans have changed and they now want to reduce the usage or even cancel usage altogether.

Should you, the photographer, reduce the original license fee and send a new invoice?

Perhaps the customer originally requested a five-year license for some business portraits but their plans changed and now they want only a one-year license. Maybe the customer initially wanted a license for sales brochures and web use but now they’ve decided to go web only. Or perhaps the work included a license for magazine advertising but the customer cancelled their advertising campaign.

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One lump or two?

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In the previous post, it was mentioned that some professional photographers will list their creative fee and licensing fee separately while others will combine the two fees into one number. Which method is better?

Combining the two fees:

• Some customers find a single fee easier to understand.

• The client doesn’t know how much each fee contributes to the total. This allows the photographer more wiggle room if they have to negotiate the creative or licensing fees.

• The client doesn’t know how much each fee contributes to the total. The photographer can benefit when relicensing the picture since the client doesn’t know what the original license fee was.

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Photography Fees Explained

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When estimating and pricing photography, commercial photographers base their price on the combination of a creative fee (also called a photography fee) and a licensing fee (also called a usage fee). Some photographers will list these two fees separately while others will combine the two into one number.

The creative or photography fee depends on the complexity of the assignment, the time involved, the photographer’s talent and experience, and the photographer’s business overhead.

The licensing or usage fee depends on how the client intends to use the finished photography.
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Invoicing Basics

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A photographer won’t get paid unless they send an invoice to the customer. For some silly reason, most businesses refuse to send out cheques just for the fun of it. After a photo assignment is completed, send an invoice. There’s no grace period required. It’s not necessary to wait a few days or weeks to avoid looking greedy.

Your invoice must contain your contact information, a date, an invoice number and your tax number(s). The invoice should spell out what the photo assignment was. A photo editor may not remember every assignment. The customer’s accounting department won’t know what your invoice is for.

Sometimes the person who hires you is not the person who will receive the invoice. So make sure you know to whom the invoice is sent. Always ask the customer if they require a Purchase Order number or any other reference number included on the invoice.
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Dialing for dollars

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Freelance photographers usually get paid by cheque and, I suppose, occasionally by cash. Some photographers, including myself, also accept credit card payments through a PayPal account. In this case, the common setup is that the client accesses a web page on the photographer’s site to start the PayPal process.

PayPal just announced its new PayPal Here system that will allow a business to accept credit card payments using a smart phone. This is similar to the up-and-running, two-year-old Square system.

There are differences between PayPal Here and Square but there’s only one difference that matters to Canadian photographers: PayPal Here will be available in Canada and Square is not.

Square says that it’s looking into expanding outside the USA but it’s been saying that for two years. Perhaps the competition from PayPal will force Square to get moving. [Update October 24, 2012: Square just announced that it’s available in Canada.]

Apparently, the Square system is/was capable of being used for credit card fraud. The PayPal Here card reader is encrypted.

For professional photographers, accepting credit card payments on location could be a big help. Some business customers and government clients can pay on-the-spot with a corporate credit card. But not being able to accept credit cards on location means the photographer has to send an invoice and wait up to several months to get paid.

Update March 18, 2013: PayPal Here is still not available in Canada.

 

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