Tuesday, February 19, 2019

Why It's Hard to Talk Pricing Publicly

Anyone who knows me, knows that I'm happy to talk pricing and pricing strategy.  I love digging into profit strategies with small business owners during consultations.  It's like digging for hidden nuggets of gold within their business.  Unfortunately, it's not as easy to do this in public forums.  A strategy that works really well for one person may be a complete waste of time for another person based on who they are, what they sell, and what kind of people are valuing their work- which is why it's really difficult to talk pricing publicly.

Each individual has their own unique world-view of what ideal creative pricing looks like to them in the scope of their experience:

  • One person may need to support a 5 person family on their creative income, and have a stay at home partner who can provide a lot of household or business support.
  • One person may have a full time job for income and only be doing creative work on the side.
  • One person may say that they only take projects for $10,000 or more, however they may also mean that every project they do requires a team of 10 people who are all working overtime to turn a project around in an amount of time that is usually unheard of to an individual doing it all on a solo basis.
  • One person may say their rates are $150 a project, which might seem unfathomably low for your costs and overhead, but what they may not be saying is that they do 6 of those projects in one day and then do extended sales sessions or additional licensing from those projects that add an additional $1350 in profit after each project.
  • One person may say they give away all files in a $3000 package, but they may not say that those files are only good for viewing on the web and not printing larger than 4x6 or putting in an album.
  • One person may say they only include 20 album pages $3000 package and files are extra, but they may not say that they'll include the files if someone enough pages to their album.
  • One person may say they include all the RAW files in a $3000 package, but they may not say that the editing of those files is extra or only included when they order an album.

All of these are examples of why discussing pricing is so difficult in open forums or even privately among other creative professionals.  

What works well for one person may be a terrible idea for another person's way of working.  Someone who hates sales would quickly fail by setting up their pricing in a way that requires them to do more sales and someone who hates working solo would total fail by setting up their pricing in a way that requires them to work solo.

We can never assume that the way someone else has set up their pricing is the same way we would or should set up our own pricing.  Which is also why you can never judge another professional based on their pricing alone- because you have no idea what goes into their pricing or what each term means in the way they define it.

This is also why the "what should I price this at" question is a terrible question to ask in forums.  You can get 10 different answers all based on how different people work and live, and none of those answers may even be applicable to you and your situation!  Super frustrating, and it doesn't lead to more clarity, only more confusion.

It is far better to figure out the numbers based on your business and understand how to price your service and products based on your actual costs, products, delivery, and costs of doing business so that you aren't jumping on a bandwagon that will send your business off a cliff!

Anne Ruthmann is a retired professional photographer in New York City. With over 13 years of success as a full-time photographer in weddings, portraits, editorial, architecture and interiors. She loves to travel the work and spend any extra time she has helping others find smart solutions to business problems. Stay in touch on InstagramTwitter or Facebook.

1 comment:

  1. Every inch of this article is correct. I can relate to this. So basically I also struggled with this, people should understand their own pricing because none other knows what labor he or she is applying.