# studios lowering pricing



## guitarkid (Dec 22, 2009)

I have finally decided on pricing, for now, that works for me.  I have heard from a few friends who work for big chain studios that more and more studios are undercutting to stay around.  This may be the new trend?  $600 including all wedding images on disc is one I heard.  Woah, that's low, and a double - edged sword.  You will get the cheap people, but may also scare away the others wanting quality.  They said more brides are starting to look at price over quality with the economy.  If you charge really low and they see your site / work and like it, you could get a booking.  Who knows.  We haven't received more than 2 calls in months so I started a basic package.  It's really slow.  Luckily we don't rely on this for a living.  

The problem with photo and video has and always will be:
1) charge too low and you are seen as not good.
2) charge too high and you're overpriced

It's really hard to find a happy medium since pricing has always been all over the map from studio to studio.


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## Big Mike (Dec 22, 2009)

I think that one of the best things you can do, is add value to your packages, rather than just dropping the price.  For example, an extra 8x10 print costs you a couple bucks...but has a much higher value to them because it would normally sell for $20-$50 etc.  

Of course, you still have to get the clients to see that...and some of them just want to see the price and move on.


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## Christos_2006 (Dec 22, 2009)

It all depends on who you market to. I for one will be raising my prices 1/1/10 and then again on 6/1/2010.
Since I only shoot 1 wedding per day, it's impossible for me to compete with studios that can shoot 10 per day. With that, i do not compete with them on price.

Long Island Wedding Photographer


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## guitarkid (Dec 22, 2009)

Mike - good point.  That's something I'm incorporating.  Plus, it lets them see the quality of the print compared to the local walmart.  If they show it off hopefully others will order.  

Cristos - That's my thought too.  Just hope to not get eaten up but studios undercutting.  And also, I include all the hi - rez photos on a disc.  To some that is wrong to do but to me, since they aren't ordering prints anyway and really want that disc, I give it to them.  There is no overhead to it and the cost is tacked on with the labor.  The way I see it, they are happy, and I make more money with less work.  It's better to do that than give them a couple albums which cost me money, and hope for print sales.  Shoot, edit in my home and mail a disc after 4 months.  Then there are still studios out there not giving away the disc making money.  Being smaller, I don't think I could get away with that.


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## Christos_2006 (Dec 22, 2009)

guitarkid said:


> Mike - good point.  That's something I'm incorporating.  Plus, it lets them see the quality of the print compared to the local walmart.  If they show it off hopefully others will order.
> 
> Cristos - That's my thought too.  Just hope to not get eaten up but studios undercutting.  And also, I include all the hi - rez photos on a disc.  To some that is wrong to do but to me, since they aren't ordering prints anyway and really want that disc, I give it to them.  There is no overhead to it and the cost is tacked on with the labor.  The way I see it, they are happy, and I make more money with less work.  It's better to do that than give them a couple albums which cost me money, and hope for print sales.  Shoot, edit in my home and mail a disc after 4 months.  Then there are still studios out there not giving away the disc making money.  Being smaller, I don't think I could get away with that.



I include the DVD as well since that is driven by demand, but the images on the DVD are only WB corrected and a slight exposure adjustment and nothing more. So far that seems to be working for me and I'm not planning on changing that any time soon.
The thing is if you are not relying on photography for your main source of income, you can use that to your advantage, you just have to positions yourself correctly.

I do disagree with " There is no overhead to it and the cost is tacked on with the labor." 
There is a cost and business overhead associated with that DVD, because it costs you money to create it, store it, archive it and maintain it. You just have to break down the cost of it so it can be realized.

Now, not dealing with albums you are just leaving money on the table sorry dude but albums are a huge source of revenue as long as they are priced accordingly. As a rule of thumb, an album should not leave your studio for less then 3.5 times the cost of goods. Now i'm sure others will disagree with that but i'm talking about bare minimum of just the COG and not the labor involved in creating it.

Long Island Wedding Photographer


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## guitarkid (Dec 23, 2009)

Christos_2006 said:


> There is a cost and business overhead associated with that DVD, because it costs you money to create it, store it, archive it and maintain it. You just have to break down the cost of it so it can be realized.
> 
> Now, not dealing with albums you are just leaving money on the table sorry dude but albums are a huge source of revenue as long as they are priced accordingly. As a rule of thumb, an album should not leave your studio for less then 3.5 times the cost of goods. Now i'm sure others will disagree with that but i'm talking about bare minimum of just the COG and not the labor involved in creating it.
> 
> Long Island Wedding Photographer


 
The cost to create the DVD is worked into the price as labor.
The cost to store it costs me nothing since I put it on my shelf.
The cost to archive it costs me nothing, as it's on the shelf.
The cost to maintain it is nothing, it's just a DVD that sits there.
The cost to create the data DVD is maybe $1
Data costs nothing once you have the hard drives

Now as far as albums, we use the best in the biz.  Very high end leather bound flush mount coffee table books, better than leather craftsman.  Yes, dude, you're right, albums can be money-generating but in this economy, I'm not too sure on HIGH.  I know many large and small studios that are only selling the smaller ones...not many people have money for $1100 hi-end flush mount digital leather books.  

And when I say there is not as much overhead, I, like you, were talking about the bare minimum in raw material costs.  A $500 album print and bind cost vs. a $2 DVD and case.  Get it?


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## SpeedTrap (Dec 23, 2009)

guitarkid said:


> The cost to create the DVD is worked into the price as labor.


OK, but did you just include the price of the DVD or did you include markup, and a case and printing for the cover of the case


guitarkid said:


> The cost to store it costs me nothing since I put it on my shelf.


Did you buy that shelf? did you buy or rent the house that shelf in in? Do you heat the room where the shelf is located, if any of these are yes, then it does cost you something.


guitarkid said:


> The cost to archive it costs me nothing, as it's on the shelf.


Did you use your computer to burn that disk, did you include wear and tear on your computer? Have you considered an off site backup incase something happens.


guitarkid said:


> The cost to maintain it is nothing, it's just a DVD that sits there.


DVD degrade over time and so they should be check on a yearly basis and re-burned when necessary, is the time and supplies for that included in your price?


guitarkid said:


> The cost to create the data DVD is maybe $1


Did you include tour time in this, I think the time it takes me to create a DVD can be up to 20 min (Checking Files, Burn Time, And Storing it), so you only think your time is worth $3 an hour?


guitarkid said:


> Data costs nothing once you have the hard drives


What about power, wear and tear, upgrades, you need to think to the future, is everything fine now, what costs would you incur if a power spike wiped out all your clients photos, or everything was stolen.


guitarkid said:


> The cost to create the DVD is worked into the price as labor.


Hard goods and Labor are different things, and should be accounted for accordingly. DVD are cheap, my time is valuable


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## rhondag (Dec 23, 2009)

I will be having a price increase for session fees and prints on 01/01/10.
I am increasing my sessions by $15/hour...and increasing my prints by about $5 (haven't decided exact amount).
For wedding packages...everything is staying the same...but I am adding some larger packages...including more 8x10's...and one even includes a 16x20 canvas.  I think they feel better about paying for a package that includes prints---rather than a package that only pays for the photographer's time.
I personally think that I am worth every cent that I charge


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## guitarkid (Dec 24, 2009)

you're right on all counts BUT i was mentioning the raw materials of the disc.  cost of disc, printing, mailing.  no more than $5.  

in any event, my time is worth more than $3, yes.  let me be more specific since it seems this is hard to grasp....

if i charge $1000 for a shoot and give them ONLY all files on a disc, that will cost me LESS in material costs than giving them a nice high-end flush mount leather album, say cost of $500.  the price would go up to cover the RAW materials of that, and double the price....so, i was talking about pure labor with digital files (no design, DVD disc is only RAW material used.)  

i don't know of anyone who breaks down the price of...
the disc
the mailing
the envelope
the gas to the post office
the burn time (20 minutes, ok, that's $43.45 burn charge, whatever)
% of the metal shelf in basement in costs for disc space
    ($200 shelf X 1% = $2 storage charge)

yes discs degrade over time and we'll be dead by the time they are worthless.  my contract states i keep them on file for X amount of years, about 2.  after that i'm not responsible for storage, so they better take care of the disc or copy it or buy more dups.

and on and on.  

The $1000 (example price) for shooting / editing / files on a disc is cut and dry.  most of it is my time.  

question for you then...

do you take into account all of the above? how detailed do you get? do you take into account the heating bill, electric bill to power your pc while editing?  use depreciation of hard drive life divided by the amount of jobs stored on it?  this is getting a little extreme but technically, it's all part of it.


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## Christos_2006 (Dec 28, 2009)

guitarkid said:


> do you take into account all of the above? how detailed do you get? do you take into account the heating bill, electric bill to power your pc while editing? use depreciation of hard drive life divided by the amount of jobs stored on it? this is getting a little extreme but technically, it's all part of it.



Yes i do, but my accountant cares much more then I. I have a very good idea what it costs me to offer a shoot and burn packages.



guitarkid said:


> i don't know of anyone who breaks down the price of...
> the disc
> the mailing
> the envelope
> ...



You should have an idea, it's really interesting to find out what it really costs you to produce that single DVD.

The best guidance i can offer you is to simply download and work on the following.
Photographers pricing guide and also the spreadsheets the accompany it.

Put some time and effort into this and plug in some honest numbers and some real honest expenses. 
Try not to fall into the "well i'm paying for internet access anyway" mentality because your accountant cares. The same holds true for running a business from home, you share many of the same expenses as a storefront except for the actual rent part.


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## KmH (Dec 28, 2009)

guitarkid said:


> i don't know of anyone who breaks down the price of...
> the disc
> the mailing
> the envelope
> ...


 Then you're not hanging out with the right business people.


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## kkamin (Dec 29, 2009)

guitarkid said:


> I have finally decided on pricing, for now, that works for me.  I have heard from a few friends who work for big chain studios that more and more studios are undercutting to stay around.  This may be the new trend?  $600 including all wedding images on disc is one I heard.  Woah, that's low, and a double - edged sword.  You will get the cheap people, but may also scare away the others wanting quality.  They said more brides are starting to look at price over quality with the economy.  If you charge really low and they see your site / work and like it, you could get a booking.  Who knows.  We haven't received more than 2 calls in months so I started a basic package.  It's really slow.  Luckily we don't rely on this for a living.
> 
> The problem with photo and video has and always will be:
> 1) charge too low and you are seen as not good.
> ...



If you are any good you should be aiming to pull in $5000 in revenue per wedding.  The Professional Photographers of America benchmark study estimates that the average wedding photography business needs to make approximately $5000 per wedding in order for the business owner to make a reasonable living.

The problem is your accounting.  If you looked at how much time you spend per wedding, what your operational costs are and how much it costs you to shoot a wedding...$600 or $1000 is terrible.

You are drifting into the area of discount "shoot and scoot" wedding photography and unfortunately I believe it is hurting the profession.

I started a thread like this over at the Canon site.  The conversation was centered around photographers shooting weddings for cheap and then handing over discs to the clients.   My favorite response came from Amphoto1.  You should read it:

Welcome to the world of Craigslist Digital Wedding Photo Services.... Also known as "Shoot & Scoot Studios". 

You are right on the money with your observations... Lost sales, lost customer relationships, lost control over the quality of your product, potential copyright infringement, no follow-through all the way to the final product.... 

Affordable and widely available digital photography has dramatically changed big segments of the market and removed many of the hurdles to "going pro" that used to keep highly inexperienced newbies out of the business... or at least slow the inflow to a sensible level. 

Now the inexperienced are actually _driving_ large segments of the business (some might say "straight into the ground" or "off a cliff"), creating business models that may or may not make sense or profit.

Perhaps it started with proof disks instead of proof books. Inexperienced people saw these being handed over and assumed that was all their was to it. Or someone got the idea to just hand over high rez files and let the customer make their own prints at Wally-mart. Soon more and more were doing that. They had to. 

Unfortunately it's now demanded by the customer... at least at certain levels of the marketplace. But I suspect it mostly started with the photographers. The "newbie" pros who didn't know any better, trying to break into the market and offering ultra low cost wedding shoots. They thought the DVD would help them keep prices low, not even realizing they were giving up one of the most profitable parts of the business... Or not caring, prefering the immediate gratification, and being too lazy to put any effort into followup.

Then there has been more and more churning competition over time, driving the package fees down further and further, as more and more people every day jump into the business, thinking "Hey, I got a Rebel, two kit lenses and a flash... I can do this!" They think it's an easy "side business" since a lot of the work is on the weekends. They have little or no experience and no idea of their cost of doing business, so underprice themselves horribly. 

The fact is that many or even most of these photogs _won't be in business long_... They'll be unprofitable and won't have any idea why. They actually think they are doing everything right, because they see so many other "photographers" doing the same thing. They never worked the more traditional business model, never ran a business before, even still think that "digital is free". (And so does the customer.)

But, even if they only survive a year or less, they will do a few jobs and the damage has been pertpetuated, even amplified a wee bit more. For each one who falls by the wayside when their Rebel breaks, two or three more step up to try their hand at it. There are even posts here from students who think some of these side jobs will help them meet their expenses, or people who have lost their day jobs and think they'll just start their own business... Boom! Instant profits! Neither recognizes the big initial investments or that most small businesses are unprofitable for a couple years starting out... That you have to feed the business your money, not expect to take an income from it typically for at least a couple years. 

Unfortunately, quite a few customers have learned to expect the Shoot & Scoot type of service. It's what their friends got, when they were married last year. So why should _we_ pay five or eight times as much (or whatever) _and_ not even get a DVD with the photos on it? 

You have two choices (well, maybe more)...

One is to play the game with the Shoot & Scoots. Jump into the fray and offer similar services and wrestle with it to try to find ways to make it profitable.... 

Or....

Set yourself well apart... Ignore the bottom/entry level part of the market (actually I suspect this is expanding into the middle of the market now too) and just work your own niche that's at some different level, that still operates more in the traditional manner. 

You'll just have to look closely at your particular market and see if there's potential in any segment you're considering. As someone with past experience, you have a distinct advantage.


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## raptorman (Dec 29, 2009)

guitarkid said:


> do you take into account all of the above? how detailed do you get? do you take into account the heating bill, electric bill to power your pc while editing?  use depreciation of hard drive life divided by the amount of jobs stored on it?  this is getting a little extreme but technically, it's all part of it.



With expenses you should go very detailed and take everything into account. 

For example driving expenses: first I split it up in business and private use (this will give me a fraction, eg. total estimated business kilometers a year / total estimated kilometers). Let's say it's 2/5. 

Every yearly expense related to my car (taxes, insurance, maintenance costs, gasoline...) should be covered for 2/5 by what I charge for my driving expenses. 

I depreciate my car over 5 years, so every year 2/25 of what I paid for my car minus what it will be worth after 5 years should also be covered by what I charge for my driving expenses. 

This will give me a total yearly cost for using my car for business purposes, dividing it by my total estimated business kilometers gives me 0.xx &#8364; / kilometer.

My time isn't free either, so my hourly rate / average km/h gives me 0.yy &#8364; / kilometer.

0.xx &#8364; + 0.yy &#8364; = what I charge for each kilometer I have to drive. Each year adjusted for inflation.


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