Hey Everyone I wrote this article for my blog, but I thought I would share it with all my DWF peeps as well. – Travis

Pricing can be one of the hardest things to establish when developing your business.  You have an endless amount of options that you need to make clear and consistent.  A client needs to be able to clearly understand what products you offer, and the difference between packages and ala carte options.  You as a business owner need to be able to understand this even more.

Some things you need to think about before you even start are price of products (what your product cost you), rent, taxes, insurance, and your time.  To make a profit you need to know what you spend and what you make from each product and package you offer, and I’m not talking about an estimate, I am talking down to the penny.  One thing many new photographers do not factor in is time invested into each job you book.  For instance if you book a wedding that includes 8 hours of wedding day coverage, you need to pay yourself for the actual time you have invested not just those hours.  How much you pay yourself is entirely up to you, but you must factor it in.

Now if you have a not photographed a wedding before you may not know that those 8 hours are only a minimum part of the total time invested in that particular job.  Here are some things you may want to think about before you decide your hourly rate.

  1. Time of wedding day coverage. 8 hours
  2. Initial client meeting. 1-2 hours
  3. Engagement session. 1-2 hours
  4. Engagement session post processing. 2-3 hours
  5. Time to upload engagement images to web and handle any questions clients may have about the ordering process and making changes. 1-2 hours
  6. Drive time for entire job, (back and forth from wedding, drive to engagement shoot, and meetings.  This could range in time depending hour far you typically drive to meet clients. 3-4 hours
  7. Procession of wedding images. 3-5 hours
  8. Blog posts, and facebook updates. 1-2 hours
  9. Album design. 5-6 hours
  10. Final Delivery and finish any finial details. 1-2 hours

As you can see 8 hours can turn into 35 hours before you know it.  Make sure you think about this when factoring in your costs.  So if you are charging $500 to shoot an 8 hour wedding you are making about $14 dollars an hour, and you haven’t even paid taxes yet.  Once you pay them you are at about $10 per hour.  Now you have to think about website costs, internet costs, phone costs, insurance, equipment, advertising and about 100 other things that are factored into overhead.  So like I said, be cautious when developing a pricing structure, that is why most businesses fail in the first 5 years.  Charge enough to cover your overhead, and make a profit, because if your not making any money than what’s the point?

So here is the great thing about owning your own business, you can establish your own prices,  you decide what you make.  Isn’t that nice?  Just make sure your clients are willing to pay what you are asking.  That is target marketing, which I will discuss in a future article.

So now we see that we are not only charging for 8 hours, we are charging for 35 hours.  Now of course you can’t offer your clients 35 hours of coverage.  That would be ridiculous.  Your clients do not see that extra time they only see you at the wedding.  But you know you will be putting 35 hours of time into the job.  After you have added up your costs, and lets just use a nice round number and say you need to make about $100 per hour to live comfortable, that will cover your overhead and let you eat out a couple nights a week.  So remember we are going to factor in the actual time it takes to shoot a wedding about 35 hours.  Now your time went from 8 hours to 35 hours, so your price is going to increase.  Your $500 package is now $3500!

Ok since we talked a little about pricing to cover your costs lets move on to package structure and ala carte pricing.  First you MUST HAVE an ala carte pricing list.  You can use an ala carte pricing list for so many things.  You can offer incentives, you can add value to packages and you can up-sell specific items that are the most profit.  I will also be writing an article on the design of pricing lists to get your client to purchase what you want them to purchase, but that is in a future article.  Ok where were we, yes, ala carte.  Here is an ala carte pricing list.

Ala Carte

  1. Engagement session $250
  2. Bridal Session $250
  3. Signature Guestbook $400
  4. 11×14 signature matte $200
  5. 1 Hour of Coverage $450 (important to have this)
  6. Parent Album $500
  7. Album Spread $100
  8. Online Gallery $350
  9. Premier Proof Package $500
  10. Hi Res DVD $500

Now clients know what each individual product costs, now you can use this to your advantage by creating value in a package.  Now we will design some packages with the above ala carte to help us.  (Notice we created the ala carte price list prior to developing packages)

Package 1.   $3,500

  1. 8 hours of wedding day coverage ($3,600)
  2. Engagement Session ($250)
  3. Hi Res DVD ($500)

Lets look at the total value of this package, add all the prices up and you get ($4,350) Now since you have decided you need $3500 to cover your costs you can now reduce this package to $3500.  You have just showed you clients by buying this package they are saving money.  Saving a total of $850 to be exact.

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Since people like choices we are going to make up a couple more packages for them to look at.  Now this middle package is going to be the one you try to sell the most because it will be your highest profit.  So lets put this one together.

Package 2.  $6,000

  1. 10 hours of wedding day coverage ($4,500)
  2. Bridal Session ($250)
  3. Engagement Session ($250)
  4. Online Gallery  ($350)
  5. 20 Album Spreads ($2,000)
  6. High Res DVD ($500)

We have added a couple extras that have really increased the value of this package.  Such as the bridal session and the 20 album spreads and the online gallery.  If we add this package up we get a total of ($7,850)  Now you find a happy price, that you can discount this package to.  Lets say we offer package two at ($6000) that is a total savings for your client of ($1,850). So if they go with your most profitable package they are saving the more money and you in turn are profiting more.

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Now we need what is called an anchor.  This package is merely meant to make the other packages look cheap.  So here is package 3, the anchor.

Package 3  $9,400

  1. 12 hours wedding day coverage  ($5,400)
  2. Bridal Session ($250)
  3. Engagement Session ($250)
  4. Online gallery ($350)
  5. 40 album spreads ($4,000)
  6. Hi Res DVD ($500)
  7. Parent album x 2 (1,000)
  8. Premier Proof Package ($500)

Ok this is the big one, the total package price for this is ($11,750)  But we are going to discount this package as well.  Now since it is the most expensive you should give this package the biggest discount.  So lets discount this package ($2350)  Now package three  has a price of  ($9,400)  Suddenly package two with a price of ($6,000) doesn’t sound that bad.  And package one just seems down right cheap.

You do not have to use these prices, you should fill them in with what your clients are willing to pay.  But use the anchor method, and create value in each of your packages.  Let the clients know what they are getting.

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As far as offering booking incentives, or if your clients ask for a discount you can use the ala cart pricing for that as well.

Here is the scenario.  A client is asking for a discount, and don’t get mad if they do.  You are not above being asked.  It is up to you to say yes or no.  Now there are two things you want to do when this happens.

  1. Keep the client happy and make them feel special.
  2. Don’t devalue your work.

So keeping the client happy.  Don’t make them feel cheap for asking for a discount. That is the last thing they want.  So with a smile simply explain how much time an effort you put into your work and how you cannot offer a monetary discount on any specific package.  So now you have taken care of number 2 and you have taken care of number 1 partly.  Now this is where the ala cart pricing comes in.  Say they are pondering over package 2 and they want $500 off.  Instead offer them and extra $500 worth of album spreads.  This makes them happy, doesn’t devalue your work and you’re not out $500, only (if you are going by this price list) 5 album spreads or 10 pages.  Which is normally (depending on your album company) is around $100.   Think of it as the cost of doing business. You just spent $100 to make $6000, that’s not a bad return.  And speaking of albums, I am going to write an article on album up selling, which has been my most profitable technique I have added to my business.

I hope this article has helped you with your pricing.  Please feel free to share this article if you think it can help someone out.  Just click the share button below and share it on your favorite social networking site.  Also if you have any questions feel free to post a comment and I will respond as soon as I can.

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