If you’re wondering how to price photography prints, but your pricing strategy looks something like this…
- “I’ll look up the website of the photographer down the street…”
- “Crap, they don’t have all of their prices listed…”
- “Maybe I’ll pretend to be a client and request a price list… nah, I’ll just look up that other photographer down the street…”
- “Oh, I’m a lot better than this, I can charge a little more!”
- “I’ll just jump on that Facebook group and ask what everyone else is charging…”
… then this post is for you.
If you’re a photography pricing wiz or have been around the block for awhile, this post might not do much for you. Feel free to head over to Facebook and look at cat photos, you’ve probably got this under control.
If you have absolutely no clue how to price your work or what you should be charging then follow me, grasshopper.
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Some Ground Rules
- We’ll be using PPA’s suggested 25% Cost of Goods Sold as our target Cost of Goods Sold. You can go with whatever you’d like, but I strongly suggest you don’t go over 35%.
- The print prices you’ll calculate are not written in stone, we’ll discuss in later posts how you can work with those product prices to still create profitable photography products and packages. This post will help you find a good place to start with your prices (hint: it’s not “well, how much is Amy charging? I’m better than her, so I’ll charge a little more”).
- I don’t even want to tell you how terribly I did in math in school. With that said, we’ll be making this as simple as possible so that even I can understand it.
Cost of Goods Sold vs. General Expenses
Cost of Goods Sold
Your Cost of Goods Sold (sometimes called “Cost of Sales”. They’re the same thing, but we’ll stick with Cost of Goods Sold, or COGS from now on for the sake of clarity) is anything you spend in your business that actually goes to producing the product that you’re selling. Another way to look at it is this – these are the things you have to pay for only if you actually photograph a session.
General Expenses
General Expenses are your fixed costs, the things you pay for even if you don’t shoot a single session (although you won’t be paying for them for long, if you’re not shooting anything)…
You get the point. In their benchmark survey, PPA suggests trying to stick to this breakdown for home-based businesses:
- 25% Cost of Goods Sold
- 30% General Expenses
- 45% Owner’s Compensation + Net Profit
Awesome. So what does that mean?
For every dollar that comes into your business, you should be spending
- No more than 25 cents on the things it takes to produce the product,
- No more than 30 cents on your rent, utilities and other general expenses and
- At least 45 cents for owner’s compensation (your paycheck) and net profit (what you’ll be reinvesting back into your business).
We’ll be focusing mostly on the COGS for our purposes today. Ready? Let’s do this.
The Ridiculously Simple Photography Pricing Equation
Cost of Physical Product + Cost for your Time = Base Price;
Base Price x Cost of Goods Sold Multiplier = Retail Price
Easy so far, right? Let’s put together a product so you can see it in action.
ProDPI 8×12 Standout (because, let’s be honest, 8x10s are the devil)
- 8×12 Print – $3.80
- 3/4″ Standout – $16.50
- Linen Texture (it’s so sexy) – $0.46
- Shipping – Free (Thanks, ProDPI!)
- TOTAL PRINT COST = $20.76
(Note: You’ll want to also add any packaging costs in here as well as anything that’s product-specific. Think design time for albums and delivery/install time if you do this for canvas collections.)
Time to Produce 8×12 Standout (these will vary based on your workflow and whatnot, so I’m going to just copy PPA’s example here, for the sake of simplicity. Yes, there are ways to lower these costs. Yes, yours will vary from these. No, I don’t know why they’re still FTP-ing images to their lab. They’re PPA, they’re old-school like that.)
- Acquire and Backup 50 RAW images – 15 mins
- Import images to Sales Software (*cough* Swift Galleries *cough*) – 5 mins
- Prepare 25 images for sales presentation – 40 mins
- Retouch 1 image for 8×12 standout – 10 mins
- Produce high resolution image in sales software – 5 mins
- FTP image to lab – 5 mins
- Backup finished print and file order – 5 mins
- TOTAL TIME = 85 minutes
- 85 minutes @ $.50/minute ($30/hr) = $42.50
Recommended Reading: How to Switch to In-Person Sales (and Kick Shoot-and-Burn to the Curb, Forever…)
Let’s Turn COGS into a Multiplier!
Ok, so PPA says we should aim for a COGS of 25% or better. And, as a reminder, that means for every dollar that comes in our business, no more than 25% should be spent on the actual cost to produce the product.
But before we can calculate our price, we need to know what “multiplier” to use that will get us a 25% COGS.
Let’s do some really simple math real quick to figure out that multiplier. We’ll use this simple formula:
100 / COGS% = Multiplier
So for a 25% COGS:
100 / 25% = 4
But remember I gave you permission to go as high as a 35% COGS? So let’s figure out what your multiplier would be there.
100 / 35% = 2.86… so let’s just use 3, because it’s easier.
For your reference, here’s what some rounded COGS multipliers are:
- 25% target COGS = 4x multiplier
- 30% target COGS = 3.5x multiplier
- 35% target COGS = 3x multiplier
Ok, now that we’ve gotten that out of the way, let’s do this!
Are you ready for this? Oh my gosh, the excitement is killing me…
Remember:
Physical Product Cost + Cost of Time = base price;
Base price x Multiplier = retail price
$20.76 + $42.50 = $63.26
$63.26 x 4 (for a 25% Cost of Goods Sold) = $253.04
Whew! That was a lot of math for us creative types.
Here, let’s just look at a puppy for a second while we gather our wits…
Ok, back to work!
So there you have it. In order to maintain a 25% Cost of Goods Sold on an 8×12 Standout from ProDPI, you’ll need to charge at least $253.04 for it.
… Or do you? We’ll talk about ways to make ridiculously priced products not so ridiculously priced in one of our next posts.
Recommended Reading: How The Printmaker System Helps Shoot-and-Burn Photographers Switch to In-Person Sales (Without Giving Up Their Free Time, Their Integrity or Their Money…)
Take Action
Grab the free calculator and spend an hour or so putting in your products and costs, then let the calculator do the heavy lifting for you.
Yeah, it’s a giant pain in the butt, but it’s absolutely worth it to know that your prices are profitable based on your own product costs and the time it takes you to create those products.
Final Thoughts
Pricing can be one of the biggest stumbling blocks for photographers, stopping many of them in their tracks while they try to get everything “perfect”. If you find yourself sitting still in your business, not making any progress, then just mark your physical costs up by 3x-4x and move on. You can always circle back later.
In other words, make it work, then make it better.
Did this post help you? I’d love to know – leave a comment and lemme know!
