Why does it seem like photography costs so much money? And if you're a photographer, how do you wrap your mind around charging so much money for a print or an album? Over the course of this conversation, you'll find answers to these questions and more. While much of the article is written with the photographer in mind, there's something in here for clients, too.
Photography often has a mysterious aura around its pricing. Everyone has experience taking photos and making prints, so the cost of a professional might seem confusing, frustrating, or laughable. For photographers, many came to the business out of passion or creative drive. Running a business wasn't the first priority.
Are you ready to understand the confusion and alleviate the frustration of photography pricing? Enjoy the Q & A to follow.
I can get an 8x10 printed for $5. How can I justify charging $50 for something that only actually costs $5?
The quick answer is that’s the way to make good money as a photographer. The more complicated answer is that your client isn’t just paying for the paper the photo is printed on. Your client is paying for several other important things: your time, your art, and your business.
If you don’t markup your print products, then you won’t have a business built for profit and sustainability, and you’ll be wasting your time.
Months ago, another Co-Op contributor, Lee Shelly, helped me understand it this way: money is all printed on paper. A $1 bill is printed on the same paper as a $100 bill. It’s not the paper that’s of value, it’s what’s on it.
You can justify charging $50 for an 8x10 print because it’s not just paper--it’s your business and your art.
But couldn't I just give my client the digital image and let them print for cheaper?
You could, but you better charge a lot more for your digital files! Once you give the digital file to a client, then you have no leverage when it comes to selling prints. You asked it yourself: why would anyone pay $50 for an 8x10 when they can pay $5 to print it yourself?
We all know "shoot and burn" photographers who charge $150 for a session and all digitals. You may even be one yourself. Think about where that $150 ends up going. $50 needs to go to taxes (30% is always a safe amount to set aside for taxes). That leaves $100 for the photographer, which sounds great! But how much time did that session take from start to finish? If it took five hours, then you made $20 per hour, which isn't too bad.
But do you get to keep all $100? Shouldn't a big chunk get reinvested in your business?
And what if you need a new external hard drive? That's $100 right there. So that $150 session netted zero income. You traded all of that time and effort for a hard drive.
Also, how many of those sessions would the photographer need for full-time income? Eight sessions each week would give you a full-time 40-hour schedule. Can you run a business and pay for your family with $800 per week? And could you sustain (or book?) eight sessions per week year after year? That's over 400 clients per year!
I won't go into any more detail about why it's almost impossible to succeed as a shoot-and-burn photographer. Another Co-Op article here goes into all of the details. Check it out.
How do I know what to charge?
What you charge depends on a few factors:
What is the actual cost of the product?
How much money do you want to make for yourself?
How much money do you want to invest back in your business?
That’s right: #2 and #3 are completely different things! Don’t lump them together, don’t confuse them. Separate them entirely.
#2 is personal income that goes to your personal checking account. #3 is for things like website hosting fees, new memory cards, photography conferences, gifts for clients, and anything else that relates to running and growing your business.
I won’t go too much further into this here, but you can head to this article to read more about creating a plan and setting financial goals for your entire business.
If I'm thinking about this correctly, when I'm the client and paying good money for photography, then I'm paying for more than just the paper or the image file?
Exactly. When you pay for a print or an image file or anything from a photography business, you're not only paying for the service or good you receive but also for the photographer's income, the business's growth, and anything else related to that business, which hopefully includes a quality experience from start to finish.
That's how every other business works! When you buy a dinner at a restaurant, you not only pay for the actual cost of food but you also pay for the building rent, salaries and wages, marketing expenses, and the experience. You can buy a steak for $11 at the grocery store, so why pay $40 for a steak at a restaurant? You pay $40 for that steak because you value everything else that comes with that steak.
Since we've all bought prints from a store, it's easy to think that charging $50 for an 8x10 is unfair and ridiculous. But now you're beginning to understand that it's more than just the print, right?
You're right. It's starting to make sense. So what should my markup be? Do I really need to charge $50 for an 8x10?
Let’s crunch a few numbers to figure this out. Let’s say that your out-of-pocket cost for an 8x10 is $5. If you’re going to do 6x markup, then you’ll charge $30 per 8x10 print.
Here’s the important thing to remember: that $30 doesn’t go straight to your personal checking account. First consider that $5 goes to purchasing the print (otherwise known as COGS, or “cost of goods sold”). You’ll also be putting aside $10 for taxes (remember, saving 30% for taxes is a safe way to run your business).
Now you’re left with $15 from that $30 8x10. A good business owner who wants to grow the business might split that $15 in half, putting $7.50 back into the business for expenses and growth.
In the end, you get to put $7.50 into your personal checking account.
That’s right--on a $30 print, you only get to pay yourself $7.50, just a little more than the cost of the print itself.
What?! Okay, fine, but a 6x markup sounds high. Couldn’t I just do 3x or 4x?
Just run the math on a 3x markup. That means you’ll charge $15 for that same 8x10 print. Here’s your new breakdown:
$5 for taxes
$2.50 to grow and pay for your business
$2.50 for personal income.
At a 3x markup, you’ve just significantly cut your personal income and business reinvestment. That’s not to mention what your price says about the value of your work.
Suddenly, that $30 8x10 doesn’t sound so crazy, right? In fact, when you consider what your time is worth and what value you put on your creativity, effort, and art, then a $50 8x10 probably sounds even better now.
But what about a big-ticket item, like an album? Shouldn’t that be marked up less since it’s already so expensive to buy?
Why would you discount the expensive items? Who does that short-change? You know the answer to that: you and your business.
Let’s say that an album costs $200 to print. At 6x markup, you’d charge $1,200 for that album. That $1,200 gets divided as such:
$300 business reinvestment
$300 personal income
Watch how the numbers change at 4x markup. You’ll charge $800 for the album, which will get divided as such:
$167.50 business reinvestment
$167.50 personal income
For the same exact album (and the same effort and time to design, proof, and troubleshoot), you’ve cut the two important lines by $265. Your business and your checking account have lost a potential $265 because why? You feel bad for your client? You don’t want to scare them away? You want to be fair? What other business operates that way?
The numbers make sense, but I’m just nervous. That’s so much more than I’ve been charging. Won’t I lose customers? I love my clients!
You’ll lose previous clients, for sure. And that will hurt. With a business as personal as a photography business, clients do feel more like friends, especially after several sessions together.
But consider this: if a client doesn’t stick with you through a fee increase, then were they choosing you for your photography or for your price?
If they are in it for you and your work, then they’ll stick by you no matter the price.
But if you raise prices and they don’t book another session, then the tough reality is that they weren’t in it for you or your business after all. They were just in it for the price.
Which is fine! We all make decisions based on price. But there are those decisions where price isn’t the main consideration. For some people, good photography is more valuable than cheap photography.
The hardest part of running a photography business is continually finding the client who specifically desires your business and your product.
Aaron Taylor is a stay-at-home-dad and professional portrait and product photographer. Aaron is forever blessed to be in love and married to his best friend and partner in parenting. Most of his time is spent chasing his curious, energetic kids, a three-year-old son and one-year-old daughter. Aaron lives in Columbus, Ohio. Before moving to Columbus in the summer of 2016, Aaron was a high school English and Drama teacher in Montgomery County, Maryland. He spent ten years in the classroom and earned National Board Certification in English Language Arts. Give him his family, a good cup of coffee, and a homemade cookie or three, and all is right in Aaron’s world.