Commercial scenario estimate

Hey everyone! I feel like I've been posting about a similar topic lately but I'm still trying to wrap my head around commercial pricing...

I recently purchased Best Business Practices for Photographers by John Harrington and it's an amazing book which I recommend everyone who wants to do things right in the business of photography.

After reading a few chapters here and there, I feel like I need to get some clarification about pricing and usage. The best way I can do it is by providing a scenario and a sample estimate...

Here we go!:

Client X wants me to shoot Y for an ad in a local magazine. They want to do a full page spot in the ad which runs 20,000 copies for one issue.

My cost of doing business per day is $570. John says to incorporate your CODB into your estimate followed by a creative fee based off 5 gears. Each gear resembles the amount of work/difficulty.

1st gear - 10%
2nd gear - 30%
3rd gear - 50%
4th gear - 75%
5th gear - 100%

I would include your post work into your capture pricing. For a few reasons. 1) it looks like you are nickel and dimeing the customers.... Are you really going to let a image out that is not going through post? If it is a standard operation you do, then make it part of the standard price. 2) it bacomes a point that can be haggled. The longer the list of charges, the more points they can call you on.

The same with travel charges. It just makes you look like you are fleecing every dime you can out of a customer. We hate customers who try to work the price down on every point they can. So why is it OK to charge on every point you can. Again roll it into you creative fee with your post processing fee... round it off to $900 And you are basically at the same price But have a cleaner invoice with less points to be called on, and does not look like you are working over the customer.

Also I never invoice with any cents in the charge. Same reason as above. always whole dollars

Mark1 wrote in post #12639550
I would include your post work into your capture pricing. For a few reasons. 1) it looks like you are nickel and dimeing the customers.... Are you really going to let a image out that is not going through post? If it is a standard operation you do, then make it part of the standard price. 2) it bacomes a point that can be haggled. The longer the list of charges, the more points they can call you on.

The same with travel charges. It just makes you look like you are fleecing every dime you can out of a customer. We hate customers who try to work the price down on every point they can. So why is it OK to charge on every point you can. Again roll it into you creative fee with your post processing fee... round it off to $900 And you are basically at the same price But have a cleaner invoice with less points to be called on, and does not look like you are working over the customer.

Also I never invoice with any cents in the charge. Same reason as above. always whole dollars

Great point. Even today, I had a client pick apart my contracts (she's an attorney...) and it definitely doesn't feel good!

Thanks for the advice on lumping it all together. Easy enough. As for travel, what do you do? Should I charge $1 per mile?

How do you feel about my minimum? My local market is a bit flimsy but I want to make sure I hit my CODB mark as well as make some profit off of that.

I suppose if I adjusted my minimum to 2 hours, this it what the new invoice would look like:

Creative fee: $700
Usage fee: $120

Total: $820

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In comparison with my old pricing at $200 per hour, I'd see myself leaving the scene with $200 in my pocket and -$370 to make up...

It all depends on your market, but 800$ for a full page -AD seems low to me.

I always consider weddings as a base point for pricing because people connect with them.

Lets say a typical wedding runs 1k$, thats 1 day shooting, couple days to a week editing, and no profit for the client.

In exchange an Ad, has to be managed, set-up, discussed, so 1 day shoot, couple days editing and couple days of business talks. Ah, but theres the profit to be received.

120$ usage fee on a 20,000 run.... Thats what less then .01 per magazine for your picture ? I guess if its a small local magazine.... But Heres something that i'm curious about.

If they're hiring you to shoot the AD, why would it only be featured in 1 magazine? Why would a magazine hire a photographer for an ad in their own magazine ?

I personally dont charge any travel fee. I just do a quick gass estimate in my head and add it to the fee. The last thing you need is to charge $50, then let it slip that "you are on that side of town anyway". Why am I paying your gass to run your erands? Dont ever mention travel. Just roll it in. Or just add a flat $20 to every shoot. It will ballence itself out with the close and far shoots. Or at least close enough that you dont have to worry about it.


Also Dont ever get into charging by the hour! Take that value and make it a "studio fee" that includes up to 2 hours. The better you get, the less money you will make! Just charge a flat fee. (As far as the customer knows) When you are new it may take you 2-3 hours to do a easy shoot. Then 3 years into it, it takes you 30 minutes to do the same shoot. Again if you are in and out in 30 minutes but charge 2-3 hours....Fleecing the customer. Its an easy to loose a customer. But if you charge a truthful 30 minutes, you cant make the morgage payment. But if your "studio Fee" includes travel, set up time, tear down time, expendables, and some shoot time. All of a sudden the same cost to the customer is now precieved as a value.

The psychology of selling is way more important than a lot of people think it is.

Csae wrote in post #12641372
It all depends on your market, but 800$ for a full page -AD seems low to me.

I always consider weddings as a base point for pricing because people connect with them.

Lets say a typical wedding runs 1k$, thats 1 day shooting, couple days to a week editing, and no profit for the client.

In exchange an Ad, has to be managed, set-up, discussed, so 1 day shoot, couple days editing and couple days of business talks. Ah, but theres the profit to be received.

120$ usage fee on a 20,000 run.... Thats what less then .01 per magazine for your picture ? I guess if its a small local magazine.... But Heres something that i'm curious about.

If they're hiring you to shoot the AD, why would it only be featured in 1 magazine? Why would a magazine hire a photographer for an ad in their own magazine ?

The exact numbers are hypothetical. I was just trying to figure out a commercial pricing structure. I've got portraits and weddings knocked out but licensing is a touchy subject in my town because nobody does it...That's why I need to establish my pricing and become the authority on the subject.

As for the magazine hiring me, I meant x as an outside party other than a magazine. I shoot for magazines but only for ad trades. Locally, magazines here probably run about 10k-15k copies.

The book I read suggests 6% of the media buy under $450k. I could go another route and purchase fotoQuote or use online usage generators that are based off specific usage rather than media buys. Either would work for me if the client isn't willing to disclose their budget for media buys.

Mark1 wrote in post #12642009
I personally dont charge any travel fee. I just do a quick gass estimate in my head and add it to the fee. The last thing you need is to charge $50, then let it slip that "you are on that side of town anyway". Why am I paying your gass to run your erands? Dont ever mention travel. Just roll it in. Or just add a flat $20 to every shoot. It will ballence itself out with the close and far shoots. Or at least close enough that you dont have to worry about it.


Also Dont ever get into charging by the hour! Take that value and make it a "studio fee" that includes up to 2 hours. The better you get, the less money you will make! Just charge a flat fee. (As far as the customer knows) When you are new it may take you 2-3 hours to do a easy shoot. Then 3 years into it, it takes you 30 minutes to do the same shoot. Again if you are in and out in 30 minutes but charge 2-3 hours....Fleecing the customer. Its an easy to loose a customer. But if you charge a truthful 30 minutes, you cant make the morgage payment. But if your "studio Fee" includes travel, set up time, tear down time, expendables, and some shoot time. All of a sudden the same cost to the customer is now precieved as a value.

The psychology of selling is way more important than a lot of people think it is.

I totally agree about charging by the hour and business psychology. That's why I wanted to incorporate a minimum of 2-3 hours ($400-$600) per shoot. Would that mean I should change the wording to a "creative fee, studio fee or location fee?". I've read that some photographers do half day and full day packages only but non of them do it in my town. (Very little here are established professionals).

I recently purchased my studio that does photography & design and it does have a reputation around town so I want to make sure everything is solid before I begin taking over...

Thanks for your suggestions, everyone!

There is a program available called "fotoQuote". It's been around for quite some time. You just plug in your job specific details and it will generate a guide to work from. It's very useful if commercial photography is a main source of income. It's pretty self contained, contracts can be written, history of commercial contracts can be arhived. Very well thought out and put together.

I'm not sure about the "gear" scale, but if you know what your day rate of cost should be, I dont see how that should fluctuate. As for the picking apart your contract, always remain firm and understand your cost plus sufficient margin can be agreed on. Negotiations are meant to be flexible, but there is a bottom line.

I understand your scenario is a sample, but the following .02c is applicable to real negotiations.

Don't forget, they contacted you because of your skill and creativity, which more than likely suits their requirements. Unless you state your price is firm with no room for negotiation, normal people will always try to knock the price down. Thats where your wiggle room kicks in and allows your to meet your cost plus margin and gives them satisfaction they tore you down a $100.

2DP wrote in post #12642271
There is a program available called "fotoQuote". It's been around for quite some time. You just plug in your job specific details and it will generate a guide to work from. It's very useful if commercial photography is a main source of income. It's pretty self contained, contracts can be written, history of commercial contracts can be arhived. Very well thought out and put together.

I'm not sure about the "gear" scale, but if you know what your day rate of cost should be, I dont see how that should fluctuate. As for the picking apart your contract, always remain firm and understand your cost plus sufficient margin can be agreed on. Negotiations are meant to be flexible, but there is a bottom line.

I understand your scenario is a sample, but the following .02c is applicable to real negotiations.

Don't forget, they contacted you because of your skill and creativity, which more than likely suits their requirements. Unless you state your price is firm with no room for negotiation, normal people will always try to knock the price down. Thats where your wiggle room kicks in and allows your to meet your cost plus margin and gives them satisfaction they tore you down a $100.

Thanks for reply! I'll be saving up for fotoQuote as I've heard some good things about it. I bolded one thing that you said because I'm not quite sure what you mean. What is .02c? I'm sure it's simple but my brain turns off past 9pm...

Knowing that my daily overhead is $570, I definitely have the ability to negotiate and allow my clients to perceive they're getting a specialty deal.

My 0.02c is just my opinion. Others may see it different, but there is one undisputed fact...real scenario or hypothetical, the cost of doing business is just that. You have to meet your expenses and make a realistic profit. That is where this business fails miserably and the market is undermined and may never be repaired. Too many people fail to acknowledge the business aspect of business, because they get too carried away with running off shots in search of the perfect image.

2DP wrote in post #12642348
My 0.02c is just my opinion. Others may see it different, but there is one undisputed fact...real scenario or hypothetical, the cost of doing business is just that. You have to meet your expenses and make a realistic profit. That is where this business fails miserably and the market is undermined and may never be repaired. Too many people fail to acknowledge the business aspect of business, because they get too carried away with running off shots in search of the perfect image.

Ha, duh! For some reason I thought something completely different with the .2c even though I see it all the time online...My brain isn't working tonight...

I agree with what you're saying as well. I'm trying to make a profit without stressing the market. Unfortunately, there will always be that $30 craigslist photographer around the corner who has know idea what they're doing to the market.

2DP wrote in post #12642271
Don't forget, they contacted you because of your skill and creativity, which more than likely suits their requirements. Unless you state your price is firm with no room for negotiation, normal people will always try to knock the price down. Thats where your wiggle room kicks in and allows your to meet your cost plus margin and gives them satisfaction they tore you down a $100.

Something i feel needs to be said, is that in negotiations its a give & take.

If you just suddenly discount them 100$ because "their tummy hurts and their low on budget" then you're not only making your value seem lower, and it gives the impression that you really are worth 100$ less then youre asking, but youre also opening yourself up to a whole lot of other weird and random requests.

Nobody is doing me a favor by hiring me, if you want my price to go down give me a concrete reason as to why and what you will do for me.

My favorite line for business negotiations is simple:

You can have 2 of the three, Very quickly, Very cheaply, or Very good.

Clients generally have little to offer us when they want to hire us, so negotiations are always one sided about what they want and need. They generally want more of your time for less of their money.

I'm actually pretty pissed at good photographers that end up randomly discounting small jobs. It gives people the impression that haggling is the norm, it shouldn't be. Negotiations should be kept only for commercial gigs where you can actually get something in return, like future gigs in writing.

EOSBoy wrote in post #12642266
I totally agree about charging by the hour and business psychology. That's why I wanted to incorporate a minimum of 2-3 hours ($400-$600) per shoot. Would that mean I should change the wording to a "creative fee, studio fee or location fee?". I've read that some photographers do half day and full day packages only but non of them do it in my town. (Very little here are established professionals).

Psychology of business is easy if you just slow down and think about things. Everybody gets in a rush and most of the time it "works" but could work better another way. I could go on for hours here but will leave it at that....

Yeah, "Location fee" is what I use. Then if it takes longer add an "additional" time line. Sub list what is included if you want without the line cost if you want to show its value. But one or 2 lines with higher prices is psychologically easier to pay than a list of 15 lower ones.

You could do half day min Just make sure you sell it as having enough value that the customer does not mind paying 4 hours, but you being there only 2.

Csae wrote in post #12643536
Something i feel needs to be said, is that in negotiations its a give & take.

If you just suddenly discount them 100$ because "their tummy hurts and their low on budget" then you're not only making your value seem lower, and it gives the impression that you really are worth 100$ less then youre asking, but youre also opening yourself up to a whole lot of other weird and random requests.

Nobody is doing me a favor by hiring me, if you want my price to go down give me a concrete reason as to why and what you will do for me.

My favorite line for business negotiations is simple:

You can have 2 of the three, Very quickly, Very cheaply, or Very good.

Clients generally have little to offer us when they want to hire us, so negotiations are always one sided about what they want and need. They generally want more of your time for less of their money.

I'm actually pretty pissed at good photographers that end up randomly discounting small jobs. It gives people the impression that haggling is the norm, it shouldn't be. Negotiations should be kept only for commercial gigs where you can actually get something in return, like future gigs in writing.

I agree. I also see another perspective on giving discounts on random shoots. Clients could get the impression that since you're giving them a discount, they'll assume that you need their business. Of course, we all need business but once the client sees this, now they'll exploit your needs and either negotiate for a lower price or force you to lower the price by threatening to drop the booking or find another photographer for cheap. I suppose you can't leave too much leeway in negotiations in anything, really.

On another subject, I feel that I've got a decent grasp on commercial/editorial pricing but there are specifics within each category that I'd like to price out for; specifically, head shots.

I'm thinking about the same minimum per commercial shoot to be applied to commercial head shots as well but at a lower rate of $400 (2 hours) for a studio/location fee. I'd also charge $50 per head but I'm not sure if I should grant unlimited web/print collateral use for 1-2 year since there isn't a lot to be made from head shots. The majority of my clients usually just use the images on their website.

My invoice for say, 13 people would look like this:

Creative fee - $1050

Included in price:
- Set up/tear down
- Studio usage fees
- Facial retouching
- Private online gallery
- Unlimited web and print collateral usage for up to 2 years

Total: $1050

I suppose I don't have to list out the specifics but it's nice to have the client be aware of what exactly is included in that fee so they don't question the lumped sum.

What do you guys think? I think it would take around 1.5 hours total to set up, break down and shoot.

Mark1 wrote in post #12644214
Psychology of business is easy if you just slow down and think about things. Everybody gets in a rush and most of the time it "works" but could work better another way. I could go on for hours here but will leave it at that....

Yeah, "Location fee" is what I use. Then if it takes longer add an "additional" time line. Sub list what is included if you want without the line cost if you want to show its value. But one or 2 lines with higher prices is psychologically easier to pay than a list of 15 lower ones.

You could do half day min Just make sure you sell it as having enough value that the customer does not mind paying 4 hours, but you being there only 2.

Thanks for the info! I think I have a grasp on the pricing and all I need to do now is make sure I list things out accordingly and psychologically. I'll probably have to check out some sample invoices online or buy some software that helps me put it together but at least I have something to work off of.

This is the age old question of supply and demand. If supply is high and demand is low prices will be low. The photographer will have to adjust his/her overhead to bring down his costs. If he/she doesn't they will end up getting less work and eventually go out of business anyway.

An alternate theory is charge what you think your worth, screw the market. You might have to have a part time job (or 3) but at least you can do what you love and make some money at the same time. I know EOSBoy personally and his skills are top notch. When his name get's out there a little more he won't have to haggle at all on price.