How do I price my work?
Before you start deciding on your pricing you need to find out how much money you need to make each month. This is your Break-Even Point. The point at which you have enough money to pay all your bills and give yourself a living wage.
So now you need to figure out all your costs over a year.
These are the things you need to consider. When you have worked out a yearly cost for each section write it down. You’ll be adding them all together at the end.
Home Office / Studio Space
If you use part of your home as an office or studio, you need to work out what percentage of your home is used for the office/studio. You don’t need to measure the square feet, just ballpark it. If your home has 10 rooms and you use one of them, then 10% is a good number.
Now if you pay $1,000 a month rent or mortgage that adds up to $12,000 for the year. The cost of your home office/studio costs you $1,200 a year
Utilities (Electricity, Gas, etc.)
Use the percentage you decided on for the Office/Studio space and divide the yearly cost of your household utilities by it.
Photo Equipment& Accessories
Now photo equipment doesn’t last forever. Even if it’s still working there is a new model out there with your name on it. So think about changing your bodies and lenses every 4 years. If you bought 2 new bodies and 3 or 4 new lenses it could cost you $12,000. The cost of a mid-range pro body is around the $3,500 mark (Sony A7R III), plus the cost of pro lenses can easily hit $12,000. If you want some top-level bodies you can pay $4500 to $6,000 for a body, but that’s your decision. What you’re doing here is setting your business up to get the equipment you want to work with in the future.
Anyway, if we use the $12,000 as an example over a 4 year period, then you need to add $3,000 to your list. 12,000 divided by 4 = 3,000
Computer Equipment and Software
This is the same as Photo Equipment. If you replace your computer every 3 years, decide how much you want to spend and divide it by 3. Then add that amount to your list.
How much does your web hosting cost a year? If you pay someone to manage your site add that cost to the web hosting cost and add it to the list.
If you don’t already have one, they cost between $12 and $18 a year. Hosting companies normally don’t charge you for your domain the first year when you buy a hosting package.
Office Supplies and Equipment
In this section, you need to decide how often you change your printer and divide the cost by the number of years. If you want to keep it simple, put it down as changing your printer every year, regular office printers are inexpensive. Add to that the cost of all the paper, ink, file folders, etc, that you use throughout the year. If you’re just starting out, work out the cost of 3 sets of ink cartridges cost and some copy paper and you’ll be pretty close.
Take online courses and educate yourself. Travel to Photography Events and check out the latest technology available. Decide what you are going to do and add the cost to your list.
Subscriptions and Dues
If you pay for a website membership, magazine subscription, or you joined a professional photography organization. Add the yearly cost to your list.
This is mainly for you guys down in the States. Figure out what you pay a year and yes you guessed it, add it to the list.
Business and Equipment Insurance
Again, find out what it cost for the year and you know what.
Some States, Provinces, and Territories require you to have a license before you start working as a photographer. Of course, they want to charge you for the privilege.
Accounting and Bookkeeping
Add up what you pay per year for accounting and bookkeeping and add it to the list.
If you are just starting out, put down $500-$1,000. A standard amount is 8-10% of profits that goes back into marketing.
Decide what percentage of your vehicle use is for business. The best way is to log your business mileage. Then add up your yearly costs for payments, repairs, etc, and work out how much of it the business needs to cover.
I would just put down 50% of the cost for a year. It’s too difficult to figure out easily.
How much do you want to earn?
This is the moment you decide how much money you want to earn over the next year. If you want $40,000 a year, that’s great, now you need to add it to your list and add it all up.
To help you I have made a spreadsheet to find your break-even point. It’s in with all the other free downloads, here – Free Downloads. Just add your numbers and have a play. Put in how many photoshoots you want to do a week and it’ll tell you your break-even point for each shoot.
If you don’t want to use the spreadsheet, you can take your total and divide it by 48. I’m using 48 weeks of work a year and 4 weeks of vacation time. The result is your break-even point for each week. Divide your weekly number by the number of shoots you want to do a week. That amount is your break-even point for each shoot. Meaning the amount of profit you need from each shoot.
Let’s say your total costs (Break-Even Point) are $64,000 a year.
64,000 ÷ 48 = 1,333 $1,333 is your weekly Break-Even Point.
If you want to do 5 photoshoots a week you divide $1,333 by 5
1,333 ÷ 5 = 266.60 ($267) this is how much profit you need to make on each shoot.
So how are you going to get 5 customers a week to pay you $333 if all you offer is digital files? It’s a really hard sell.
What you need to do is offer products like canvases, framed prints, metal prints, albums, photo books, collages, and posters.
Here is an example
A 30”x40” Canvas costs $250 + $10 shipping (mpix.com) That’s a cost to you of $260. Now multiply that by 3 and it comes to $780, so round it up to $799.
Your profit is $539 (799 – 260 = 539)
Selling just one canvas makes you $272 above the $267 profit you needed to make (Break-Even Point).
Your next step is to build a price list.
Don’t stress out over this. Price lists are always changing, as long as you have a price list you’ll always be tweaking it.
So the first thing you’re going to do is check out 2 or 3 Photo Processing Lab websites (links below). Check out the products available and think about what you want to offer to your customers. You want to be known for a certain type of product. Maybe it’s large canvases or framed prints, not 11×14, but 30×40 or 40×60. It could be high-end albums that customers want from you.
You are going to choose the following;
Wall Art – 2 or 3 styles (Canvas, Framed Prints, Metal Prints, or Acrylic Prints)
Albums/Books – 2 Styles
Accessories – 2 or 3 options
Gift Prints – 3 Sizes 5×7, 8×10, 11×14
Digital Files – 2 options (1 for $250, all for $2,000)
So now you’ve picked the products you want to offer, now you need to price them.
The easiest way to go about this is to add the product cost plus shipping and then multiply the total by 3 or 4.
Don’t worry that the price for larger pieces is high. Your customers know your prices. They’ve been to your website, seen your work, signed up for your email list, and decided to work with you. This isn’t selling, you are just giving them what they want.
On your website and price list, always put the most expensive prices at the top. This is price anchoring. After seeing the high price everything else will seem more reasonably priced.
When you are pricing the gift prints (5×7, 8×10, 11×14) keep the prices high. The same goes for the Accessories. You want your customers to see more value in the larger prints. Offer the gift prints and accessories as a bonus when they spend over a certain amount, $750 for instance.
If they spend $799 on a Framed Print you can give them a Desktop Canvas which is priced at $150 for free. They see a $150 bonus even though it only costs you $24.99.
The same goes for digital files, priced at $250 for 1 and all of them for $2,000. If they spend over $1,000 they get all the files used to create their order for free.
Another thing you need to do is charge a session fee. Without a session fee, you will get no-shows, they need to have some skin in the game.
Some photographers give the session fee back as a photo credit. Others give only part of the fee back as a photo credit. You could charge $250 for the session fee, give $100 back as credit and keep the $150 to cover your break-even point.
Just make sure you have a session fee.
- Find your Break even Point
- Decide how much you want to earn
- Choose your products
- Price your products (Price List)
- Make sure you get a session fee
Photo Processing Labs