Pricing and Licensing
So no pricing, this is a big one. I think that a lot of photographers don't understand why you wouldn't want pricing on your website. I don't have rates, I don't have a price list, and I'll tell you why. [sighs] I think you're backing yourself into a corner by listing your prices on your website. Let's say, you know, Nike comes to you and then let's say Bob's Hardware comes to you, would want to charge the same to Nike as you would Bob's Hardware? No. [Chuckles] Nike won't even work with a photographer with, let's say, low rates, and Bob's Hardware might have a bigger marketing budget than you can possibly fathom, you never know. So, some may argue the point of, you know, just not having pricing on your website, I'll just get to many emails, and I just don't understand why on earth you would never want a client, potential client, to not email you, you know? Like you want to talk to as many people as you can cause you just never know where that'll lead. Even if they have two dollars, yo...
u know, it's like you just never know. You never know where that relationship might go if you do that photo shoot pro-bono and say, "Hey, ya know, this sounds like a cool thing, I'd love to do it, but don't worry about it, ya know, just keep me in mind in the future." Goes a long way. By not listing pricing on your website, it gives you the ultimate ability to charge whatever you want. And so, pricing seems to be the muddy water in which a lot of photographers struggle to navigate. It's the one thing I really had a tough time with when I first started. It really required a number of years to sort of wrap my brain around all the types of pricing in the photography industry. It took a lot of cheap jobs at first, and a lot of chit-chat, sort of, to figure out the threshold of small market to medium sized market pricing. But every prospect, every client I have, deserves a customized quote, a customized product, a customized quantity and price. Take the time to deliver that. So before we dive in to pricing, there's a few points I want to show you to sort of navigate this muddy water. First, I recommend that you calculate your annual overhead, or your cost of doing business. So, if you all are photographers and entrepreneurs, how much is gear going to cost? How much would a studio potentially cost? How much would driving, mileage, all this stuff, meals on the road, what would it all sort of cost? And build that in sort of an annual, a realistic annual overhead. Then you wanna estimate a realistic annual revenue, how much money do you wanna make? You wanna make six figures? Tally it up, let's do it. So then you add your annual overhead with your annual estimated revenue, and you divide that by 12. 12 months. That's how much money you need to make per month. And then you can take that and you can divide that by, let's say, four, eight, twelve, twenty, those are how much, that's how much you need to make on every photo shoot you do. Whether you do four photo shoots a month, eight photo shoots a month, 12, 20 photo shoots a month, [Laughing] I've done 36 photo shoots in one month, so this is your bottom dollar per shoot. This is what you have to make to achieve your goals. Your bottom dollar is your bottom dollar guys, you got to stick with it, you know? I see a lot off photographers that have bottom dollars set and they're like, "Well you know, I don't really have that much money now so, I'll just go ahead and do it." You just can't be influenced by the number in your bank account. You just can't be influenced by financial parameters at all. So, throughout most of my music and photography career, I've found myself scouring through the couch looking for change to bring my bank account into a [laughs] positive number. But you just got to stick to your guns, stick to your bottom dollar. If someone can't meet that bottom dollar, say no. You can't do it. Determine your market value. Next, I would do a lot of research in to photographers in your area. So, let's say you're in Fresno, California or you're in Raleigh, North Carolina or you're in Grand Rapids, wherever you might be, research other photographers. Google is a super powerful tool. A lot of these photographers might list rates on their website, you just never know. I'm not saying be like a private investigator or anything but, I would just do your research. That's how I did it when I first started and I saw what other photographer were charging in my market, and then I kind of got some sort-of like, you know, basis of where I need to land. Also, if you've built relationships with a lot of photographers in your market, which I did at first, they'll just tell ya, if it's a healthy relationship, which, most of my friends are my competitors in Louisville. I've got tons of friends that are photographers in the Louisville market, and we'll just talk about pricing all day. There's a reason why they got that job, you know, it's healthy. It's like, "Ah god you got that job, I wanted to get it," let it motivate you, you know? Let it be a healthy competition. If you form those kinds of bonds with other photographers, they'll probably just tell you what they charge. So once you've analyzed the market value, it's time to really set your worth and own it. I tend to reduce industry standard bids by 40% for clients local to Louisville, Kentucky. A city under of like 300,000, I would like reduce that to 50%. Let's say someone's like, you look up a photographer in New York and you see like he's charging this, I would cut that sucker in half when you're in a small market, or when you're in a medium sized market. So, you know, like a standard commercial license in New York would be, I would quote, 40% less to, let's say, a client in Fresno, or a client in Grand Rapids. Depending on the client, of course. The most important step to practical pricing in a small or medium market is gaining the confidence to say no. Once you brand yourself at a higher value, then you are worth that higher value. You have to have the product to back it up, of course, but you're worth it. And you have that perceived value, you have that value, but you have to say no first. You have to say no to those small jobs, and it's hard. It's hard when you're trying to run up the treadmill and climb up the mountain, you know? It's important to understand how other photographers in your market price and distribute their photography as well. So we're talking about commercial photography today. The commercial pricing structure is broken down into a series of fees. Editorial is usually like a one flat rate assignment fee. Newspapers, they tend to pay a yearly salary and it's usually a work for hire basis, which means that their company owns the copy right to those photos and they're just paid salary to take those photos; that's how newspapers mostly work. Finally, let's say a wedding, family, baby, portrait photographer will likely make it easy for their clientele, they will include everything on an inclusive one time flat fee with, a lot of times, an a la carte, sort of, print sales bases. So, it's important to understand how other photographers in other genres work so that you can better price your own work. So let's focus on commercial pricing. It's by far the most complicated and misunderstood, I think; especially when you get into licensing. These are fees you'll likely see on a commercial photography estimate. So we're gonna walk through each one of these. First begins with the creative fee. The creative fee is fee that's usually combined with a licensing fee, and it can be set at whatever you feel is best for the perspective client. It can be whatever you want. I've seen creative fees be a couple hundred dollars and I've seen creative fees be [blows air] tens of thousands of dollars, you know? It's whatever you want. But it usually includes sort of a pre-consultation, the actual production, and often times for me, my equipment. The license fee is the client right to use the image, which we're going to dive into shortly, but it's a negotiable fee based on a number of variables, it's sort of complicated, we'll get in to that. The client review, this includes: importing, culling, proofing- as you can tell we're breaking down every little process, every little process is an expense, time is money. Everything can be billed. And, you know, you can charge that by half day, full day, or hourly. Re-touching is considered an expense. I contract out my re-touching. I contract out Pratik, for example. I've used Pratik a few times. Re-touching is an expense, and it's usually broken down in to per image, or like a combined fee for the entire project, but that includes compositing and skin work. The color in post-production can often be combined with re-touching, but I consider it a separate expense because I put so much time into color grading. Color grading for me is a pretty extensive process which, it's a process in which I will put an additional, like an initial color grade on something and then I'll step away for a number of hours and I'll come back to it, and then I'll step away and I'll come back to it. Sometimes it's a day's worth of process so, I spend a lot of time doing color grading and it's a very important aspect cause it's like my personal touch on the photograph. Then there's delivery. Delivery time is often combined with like, let's say, a client review. It can require hours and hours to upload [sighs] a number of images to a cloud or to your server. So this includes those hours a lot of times, and it also includes any revisions that the client might have in post, after you've delivered the final set of images. The assistant fee. Well, I have my own rate in paying my staff. I have a first assistant and I have a number of interns. I include this additional fee to the client. This includes: a light and grip assistant, a production assistant, the PA helping you out. This could also include a digital tech. Half day/full day rates, that's usually the industry standard of what they make. And of course, depending on the project, additional expenses will be billed to the client, especially if you have a project with, let's say, an over night stay and traveling, or you're going somewhere crazy. The estimate, I usually make them very vague. I usually make an estimate of vague expenses cause it provides the cushion and, at the end of the day, the opportunity to make more money off expenses. You can mark stuff up, happens, all the time. So expenses will include: meals, mileage, parking, lodging, miscellaneous; it's a vague estimation of that. So with licensing, it's not black and white. This is like very confusing for a lot of people, but you have to understand, there's a lot of shades of gray with licensing. A lot of photographers of agencies will actually create their own terms to define a license [chuckles] or their own verbiage on licensing; however, it's sort of industry and standard practice that somebody can generate a lot of revenue off licensing one image. I know a lot of photographers do it all the time, I do it all the time. I get approached by editorial clients. So, let's say I- for example that pro-sales magazine topic I was talking on. I get hit up by a lot of people I have photographed for various magazines such as, Forbes. I photographed this guy who had created this Uber for trash, pretty much. He had partnered with Leonardo DiCaprio on this business and, called Rubicon Global, and I photographed him for Forbes and he came back to me and wanted to purchase a license to use that photograph in his business, which again, I made more off [chuckles] the license than I made in the actual editorial from Forbes. So, it can generate a lot of revenue for your business if you truly understand it, stick to your guns, and say no if they want it and they're like not willing to pay for it.