A big question that any newbie commercial photographer will ask himself is how he should price his work. There is always a wide range of prices in all genres of photography, and they all depend on your level of work. But there is one truth that can apply to most photographers: you cannot apply a simple pricing strategy to your work.
Many photographers tend to be confused about the price of their images. It’s hard to do well because you don’t want to overload or underload. If you overload, you might be seen as overly greedy or proud. If you under-bill, customers will think that you are just starting out, that you are not qualified, and that you have a hard time attracting more reasonably priced customers.
There is information on the Internet that tries to turn the art of pricing into something easy to do. A commonly suggested approach for photographers is to do it the old fashioned way. Let’s take a look at what this means and why it might not be the best way to price your own services.
A basic pricing strategy
You may have heard that pricing your job can be based on a simple formula that dictates that you should be able to cover your costs and make a profit on top of that:
Incoming money (earnings) is what your business should generate per year. It is essential to make sure that your income is greater than your business and personal expenses (if you are a one-person business).
Profit is what you actually want to pocket each year. As a business owner, your goal should be to maximize profits.
More money will be your expenses and taxes.
the expenses of your business are the costs of running your business. This can include rent, travel, insurance, marketing, equipment, repairs, membership fees, trial sessions, etc. Keep in mind that photographers will be very different when it comes to their expenses. It’s always a good idea to keep detailed track of all your business expenses, and this can be done with accounting software.
Taxes are self-explanatory. You will have to pay your government what it is owed.
Let’s look at another formula:
the Total income required is the amount of money you need to earn per period (usually an exercise).
Why is it not working?
Now that you’ve calculated the total income needed, you might be tempted to divide it by the number of days you want to work per year and calculate a daily rate from there. Unfortunately, this is often not the best way to determine your prices.
Commercial photographers, for example, depending on their level, typically have no more than 40 jobs per year. Often times there can be a smaller number (even 3 or 4) of big jobs per year that cover a large percentage of the total revenue needed. The rest are small jobs that may even be less than what you think you should charge per day.
In essence, the simple pricing strategy can fall apart when you apply it to the real world of the market.
So what is working?
There are many ways to charge for your photography: daily rate, per job, per hour, per image, etc. I strongly suggest that every commercial photographer starts with:
This is a common method for commercial photographers, so it is a good idea not to confuse anyone with a different method. Let me explain what your daily rate should be and what usage you should charge.
Your daily rate covers the base cost of filming – it is not how you make money. It’s just the money that is paid to have you on set for a day of filming. Depending on your market, the daily rate will change. For example, a photographer in Hungary will likely charge less than in the UK.
There are several daily rates for markets such as the United States. Keep in mind that these numbers are only based on my experience – your market may be different from mine and therefore have different prices.
50-100 $. This is the daily rate that you can apply at the very start of your career. You probably don’t have a lot of experience and equipment. At this point, customers aren’t paying for the usage because they don’t know what it is or don’t have a budget for it.
$ 500. You are no longer in a camera club. You probably have a solid technical background and don’t need to seek advice from your peers as the information you need is hard to come by on the internet. This is the moment when you think you’ve ingested the internet but still lack something that separates you from the best photographers. At this point, customers are still not paying a usage fee because there is no budget for it.
$ 1,200. More successful commercial photographers have told me that it doesn’t take much more to go from $ 500 to $ 1,200, it doesn’t take much more. Personally, I’m not there yet, but I’ve been told that at this point you need to have a niche and stop being a jack-of-all-trades. When you charge that much, you will usually be working with an agent who will negotiate on your behalf. However, don’t think that you have to charge $ 1,200 to get an agent – you can get an agent at most stages of your career. Just like clients, some agents work with different levels of photographers.
$ 2,000. Bigger clients and bigger budgets. You’ve probably been in the industry for at least 10 years.
$ 10,000. You work on global campaigns for some of the biggest clients in various industries.
Anything over $ 10,000. You are probably Annie Leibovitz or someone of her caliber and world renown.
Use and license
If you have experience in commercial photography, you may be aware that photographers often charge use in addition to their daily rate. Licensing is how you will make money, not from your daily fee. 99% of the time, the usage charge is higher than the daily rate.
Usage fees are calculated based on the scale of the campaign. The reason photographers have started charging for usage is that customers don’t want to pay the same amount for a local print and global display campaign. The scale is very different, so it’s only fair to charge less for a small local print campaign as opposed to a global billboard.
Determining how much usage to charge is often straightforward. The AOP (Association of Photographers) has a useful calculator that determines the approximate amount you should charge. While it takes a stereotypical approach to pricing, I can guarantee that no one will pay exactly what the AOP suggests. User fees are often where the negotiation takes place.
Since usage is much higher than the daily rate, you will likely find that customers will not touch the daily rate, but will do everything possible to reduce usage. This is because the AOP sets out arbitrary guidelines that no one should adhere to.
Your price will be a combination of your daily rate and your usage. Again, you need to price what the market can handle, not what you want. Often times what you want will be more than the market can handle, so it’s a good idea to keep an open mind when it comes to trading. And it’s not a bad idea to have an agent do this for you.
As you can see imagery pricing isn’t a science, it’s an art. You are unlikely to go anywhere thinking that you can apply a simple old formula. You will likely overcharge small jobs and significantly undercharge big ones if you only charge a calculated daily rate.
Your daily rate will also not be determined solely by your spending. You should find out what photographers in your niche and region charge and compare yourself to them. This can be done by seeing if you are working for similar clients or if you are taking pictures of the same quality. Determine your daily rate based on what others charge and adjust your spending accordingly.
Image credits: Stock photo licensed from Depositphotos