Ethics of undercutting

[Karl Johnston]

Is undercutting your competition ethical, in your opinion, or is it another segment of doing business that just goes with the trade?

I was told by someone that a local company with a contract to the highschool was doing the portraits of the kids for xx$$ and he was wondering what it would cost if my firm did it, and I replied significantly less as the local company is significantly smaller and only one guy runs it.

So he was wondering if I could offer the same service, in another location off of school property ..basically the same packages (not exactly the same of course but you know what I mean, i hope) for 25% cheaper than the contracted company for the highschool.

Is that legit? Or, if not, is it ethically correct in your opinion? Could I get in trouble for that if the local company holds the contract with the highschool to do their images or am I immune ?

We planned to make a bid on the contract in the next coming year as it expires.. but then I thought of this, so is it okay or is it a shady way of business?

[MJPhotos24]

I have my prices set, they are not the highest and not the lowest. This case you said doesn't sound like you're undercutting, you're just cheaper. If you went and lowered your prices to undercut him that would be a different story.

As for the other part, shooting while someone else is under contract with them is unethical IMO, until they get rid of them. If they have a contract you shooting would be in violation of it, not a good thing.

[KHatch]

It depends on the contract/deal he had with the school (yearbook, sports, free session for yearbook only, etc.).

Are you saying you'd do all/most of the kids' pictures off school property? That might be a bit impractical, especially for the kids - trucking them to the location, scheduling, etc. With sports and other extra-curricular activities, you may have trouble getting the kids in outside of school hours.

If it's just a matter of giving the kids a choice, I'm all for that. They'd have to come to you and some may find the savings worth the effort, some may not. I'm ignorant to the laws in Canada and your province.

[Picture North Carolina]

Is undercutting your competition ethical, in your opinion, or is it another segment of doing business that just goes with the trade?

Business is business. The phrase "starving artist" was coined for a reason - think like an artist in a business environment and you'll starve. Think like a business man/woman, and you have a chance to succeed and prosper.

If you went and lowered your prices to undercut him that would be a different story.

Why? Please explain why a photography business should not strategically position pricing with the goal of being successful... with the goal of being profitable?

[Karl Johnston]

Well the way I was thinking of doing things was to send out notices to the people (i've got the list) who were applying for pictures and offer a reshoot, or a shoot with the same package (or better) at my own studio for a little cheaper.

I think it sounds legit, ;) cheers.

[JulieNick]

I wouldn't under cut or go cheaper, I'd offer quality photos. Quality sells. I've seen businesses go out of business trying to undercut their competition. The quality of the product suffered and not much of a profit margin.
Get em by quality, not price :)

[old git]

If you can offer the same service at a lower price & can keep the customer happy....well thats business. I took over the photography for a mx club last year, mainly because the service from the bigger firm was rubbish.. I didn't feel bad one bit.

Go for it

[Gentleman Villain]

Have no mercy on the competition :p

Don't ever do anything unethical or illegal like plagiarism, libel, slander or launder money etc etc....but pricing your competition out of business is part of the game. If another photographer can't stand the heat then they should get out of the kitchen.

[Alleh]

Business is business. If you can actually produce images while making a profit (most people don't realize the extra $500 for the wedding they shot over the weekend is not really profit) for less than your competition and you are willing to work at those rates then go for it. Nothing unethical about it.

[MJPhotos24]

Why? Please explain why a photography business should not strategically position pricing with the goal of being successful... with the goal of being profitable?

I guess it's because of the profession and the fact many I work with, or compete against, are colleagues who I respect so I wouldn't lower my prices to undercut them. Not to mention my prices are set, why would I lower them to land a job and make less when I can move on to another company or league that will meet my prices?

Thing that's scaring me is nobody is really mentioning what contract this guy already has, offering a shoot to them as a "re-shoot" may be in violation. You want to check this first.

[DennisW1]

Is undercutting your competition ethical, in your opinion, or is it another segment of doing business that just goes with the trade?

I was told by someone that a local company with a contract to the highschool was doing the portraits of the kids for xx$$ and he was wondering what it would cost if my firm did it, and I replied significantly less as the local company is significantly smaller and only one guy runs it.

So he was wondering if I could offer the same service, in another location off of school property ..basically the same packages (not exactly the same of course but you know what I mean, i hope) for 25% cheaper than the contracted company for the highschool.

Is that legit? Or, if not, is it ethically correct in your opinion? Could I get in trouble for that if the local company holds the contract with the highschool to do their images or am I immune ?

We planned to make a bid on the contract in the next coming year as it expires.. but then I thought of this, so is it okay or is it a shady way of business?

If I read you correctly, the school already has a contracted photographer, are they asking you to do this while they are still under contract to someone else, and do you really want to stoop to doing business like this?

Whoever the "someone" is, I'd not trust him. If he is willing to pull a fast one like that on their contracted photographer, what's to say he won't pull the same stunt on you when he finds someone else who is potentially cheaper?

[danir.photography]

Is undercutting your competition ethical?
You must be kidding me. How badly do you want to eat? To keep a roof over your head? In business 'ethics' has nothing to do with competition. If you can do the job faster and cheaper than you have NOTHING to apologize for.

[turbo212003]

I don't see it as undercutting. There is a market for less expensive photography. Not everybody can pay $1,500+ for a wedding photographer.

[Graybeard]

Well the way I was thinking of doing things was to send out notices to the people (i've got the list) who were applying for pictures and offer a reshoot, or a shoot with the same package (or better) at my own studio for a little cheaper.

I think it sounds legit, ;) cheers.
According to your quote, I understand that this other photographer has already done the shoot!...if that's the case then definetly not!...THATS UNETHICAL

[MCS_80]

Business is business. The phrase "starving artist" was coined for a reason - think like an artist in a business environment and you'll starve. Think like a business man/woman, and you have a chance to succeed and prosper.



Why? Please explain why a photography business should not strategically position pricing with the goal of being successful... with the goal of being profitable?

I agree.

Business is business and if you are more expensive than others, you have to be good enough to show why you charge more.

Cheers

Mick

[Dennis_Hammer]

Mike is right if this guy has a contract, and you and the co-conspirator know it, you would need to expect legal action if I was contract holder. And it would be you, the slimy guy trying to get around the contract and the school board on the suit. And I would make sure all newspapers had all of your names spelled correctly.

ps Why would you want to business with a guy like this anyway. Don't you think he'll do it to you first chance he gets? Also would this be okay with you if it was your contract?

[MJPhotos24]

From some of these responses it seems many are confusing what undercutting and pricing structure is. Just because you're priced lower than someone else doesn't make it undercutting, this type situation though does seem that way. Plus, yes as Dennis said - if they do it to this guy what's stopping them from doing it to you?

[Picture North Carolina]

if they do it to this guy what's stopping them from doing it to you?

Exactly the point. They can "do it to you." It's the essence of the game that is called business. It's called competition.

It's why those who understand about and can survive in the competitive world of business competition can survive and prosper and why those who think there is some sort of "honorary doctrine of pricing fairness" in the business of photography (and I repeat, the business of photography) are eaten for lunch.

[LBaldwin]

1. I want my customers to come to me for the quality of my images, not my price.
2. If you know what the other guy charges and you lower your prices to beat his pricing that is undercutting - no way aroundit.
3. What comes around goes around and that is ALWAYS how business is done. Think long term - what do you want your name to be known as - the cheapest guy in the area that can push a button? Or as an honerable businessman.
4. Raise your prices - you will make more money.
5. You undercut the other guy and then he does it to you and pretty soon both of you are under your CODB - then what? It's not like you have hundreds of other products to offer..
6. The other guy probably understands just how much ACTUAL work this is compared to what it costs to do. Trust me it is a PITA to do these types of shots and the profit margins are VERY small compared to real work times. I have a good friend that only shoots Jr Hi and HS dances and proms. He has been undercut by every weenie in the Silicon Valley at least once and the schools eventually come bak to him and he is understanbly more expensive, but he has the gear and more importantly the know how to shoot a HS Prom with 1200 couples...

[D Thompson]

I was told by someone that a local company with a contract to the highschool was doing the portraits of the kids for xx$$ and he was wondering what it would cost if my firm did it,
The part I think is very unethical is them telling you what the other guy is charging so that you could undercut. It they told you what they wanted and you gave them a quote without knowing other bids and you come in less then that's one thing. Knowing the other guys bid and undercutting is another. They'll probably reveal your quote to someone else so they can do it to you.

[_aravena]

If you don't mind charging cheaper then go ahead. Gosh, why does it matter? I have set prices but I work out deals if I need to. Helps create some clientele.

[S.Horton]

Well the way I was thinking of doing things was to send out notices to the people (i've got the list) who were applying for pictures and offer a reshoot, or a shoot with the same package (or better) at my own studio for a little cheaper.

I think it sounds legit, ;) cheers.

When I read this, I think that the other photographer has already done work, and now you're in the unique position of having access to his/her order forms.

Is that correct?

[MJPhotos24]

Exactly the point. They can "do it to you." It's the essence of the game that is called business. It's called competition.

It's why those who understand about and can survive in the competitive world of business competition can survive and prosper and why those who think there is some sort of "honorary doctrine of pricing fairness" in the business of photography (and I repeat, the business of photography) are eaten for lunch.

Again, seem to be missing the point of undercutting and strategic pricing - there IS a difference. Those who undercut and do harm to the overall business of photography are the ones who are usually eaten for lunch as you say. Seen it WAY to many times as photography is my full time job and has been for years now. The guys who have there prices set, stick to there guns, and of course produce, are the ones who stick around. The people undercutting and doing some questionable business practices just to land jobs are always the ones who end up going away, for many reasons.

Having your prices set is not the same as undercutting, there's the budget photog and the high end photog - not in the same market. If the high end photog starts undercutting the budget guy to get rid of him or something that's pretty stupid and harms both businesses. If anyone views undercutting and questionable business practices as competition then luckily they won't be around much longer to worry about, or at least they won't be much competition.

Guess it comes down to this - if I lower my prices to undercut someone just to land a gig then I'm undercutting myself. I have my prices set for a reason, if someone can't meet them then they can find someone else. My prices may change client to client and depend on several factors, the college down the road will pay less than the one two hours away because of travel/time/etc. Prices have a reason for being set, least in a good business. So why would I undercut myself and lower what I feel I'm worth by undercutting someone else? Makes no sense, and again, has nothing to do with what your prices are set at to begin with.

[S.Horton]

The part I think is very unethical is them telling you what the other guy is charging so that you could undercut. It they told you what they wanted and you gave them a quote without knowing other bids and you come in less then that's one thing. Knowing the other guys bid and undercutting is another. They'll probably reveal your quote to someone else so they can do it to you.

+1

And, here's what I think will happen:
1. You'll send your e-mails making an offer
2 The other photog will notice it
3. The other photog will call the people who gave you the information
4. The people who are helping you will say something like "we did not know"
5. Someone, or several people, will call you about the mess
6. You'll have to explain yourself

And, where you live, word will spread very, very quickly about what you did.

In the end, all you really have is your reputation. Protect it well.

[Karl Johnston]

This is an interesting read, interesting to know everyone's POV.

[Picture North Carolina]

This is an interesting read, interesting to know everyone's POV.

Unfortunately, some just don't get it. They just don't understand the structure of a competitive business environment. They myopically focus on the meanings of words while ignoring the much more important global view - the foundation and principles of successful business strategies.

[S.Horton]

Ok, Canned has a point there.

Kajuah, your goal is to sign a contract, not to make a couple hundred bucks today by using information that you should not have in the first place.

That said, so now you have an advantage, and it really doesn't matter how that happened.

And if you're comfortable with the idea that the contract may be disregarded by the other party, you're good to go.

So, I would suggest that you present a fair price with a contract for signature, see what happens.

As for your ethical issues, I don't think you have any because if you're sleeping well, that's all that matters. To you.

;)