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11/14/2008 10:31:04 AM · #1 |
My sister, her husband, and I started a photog business about 3 months ago. Right now, we are almost making enough to pay rent on our studio, which was our three month goal. So far, so good.
Partnering up has been great for the most part. Bro-in-law is an excellent people person and our main tech and light guy, sis does all the marketing and is a grad of NYIP, and, well, I do all the flyers and brochures and take some really awesome photos. : )
Anywho, bro-in-law is really having some issues with the prices we've come up with. Here is a gist of what our portrait prices are:
Sitting fee is $50 for 1/2 hr in studio, $100 for on-location shoots. Packages are basically 'sheets'. A sheet can be 1 8X10, or 2 5X7s, or 4 4X6, or 12 wallets. 1st sheet is $20, additional are $15. These are purchased prior to sitting.
A la carte prices are available for a month after:
8X10 - $22
5X7 - $15
4X6 - $9
These are around $10 less than our biggest competition and we take better pics in my opinion.
I was hoping to convince my peeps to raise these after our name gets out as I feel they are really cheap, but last night, bro calls wanting to lower our online a la carte prices even more. Am I wrong? Are these prices too expensive?
Here are some of the photos from the shoot that he wants to cheapen. There were no sitting fees at this vendor show and we didn't require them to buy a package.
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11/14/2008 10:49:28 AM · #2 |
If you are looking to run a studio and pay three wages, those look low...
How many gigs per week would you need to fulfil those costs at those prices? Perhaps you could try and convince him by looking at it from that perspective? |
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11/14/2008 11:52:02 AM · #3 |
What does your sister say? She's the one doing the marketing, right?
With no sitting fee I think these are probably a little low but don't know much about what the market rate is. |
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11/14/2008 12:07:35 PM · #4 |
Originally posted by cpanaioti:
What does your sister say? She's the one doing the marketing, right?
With no sitting fee I think these are probably a little low but don't know much about what the market rate is. |
My sister is the one who kept him from setting it ridiculously low.
His theory is to bring in more business, but I don't want to offer everything at half the cost just to have twice as many clients. I'd rather have fewer clients paying twice the money. But I may be jumping the gun here since we just started out. I'll leave it for a while and bring it back up when we get our name out more. |
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11/14/2008 12:10:34 PM · #5 |
| If people are buying them, why change? If they are not, you may need to ask why. Quality obviously isn't an issue. |
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11/14/2008 12:41:43 PM · #6 |
I would find a way to politely remind him that each of you bring different strengths, skills and expertise to the partnership and that the one with the marketing expertise is your sister. I'm assuming her marketing knowledge includes merchandising too?
On a more general level you need to agree upfront how disagreements about the business are going to be resolved? Will it be by majority vote? Will it be a case of giving each of you a directorial responsibility for different areas of the business, and for those areas you've been assigned, you consult the others but have ultimate decision?
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11/14/2008 12:47:13 PM · #7 |
Generally speaking these are a bit low. My wife and I got a DVD with our images (straight from the camera with no processing) but to have them edited and then printed the prices were considerably higher than what you are charging. People are also wary of the expression "you get what you pay for". So if you go too low in price people are going to think that the results are cheap as well.
And as karmat mentions, if the price point is working why change it?
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11/14/2008 01:12:47 PM · #8 |
Originally posted by karmat:
If people are buying them, why change? If they are not, you may need to ask why. Quality obviously isn't an issue. |
They used to be a lot lower until sis and I upped them recently. What I posted was the compromise we came up with her husband just before posting all the Santa pics yesterday afternoon. They were a few dollars more. Whether they sell or not still remains to be seen. I imagine they will... and would have at our slightly higher prices. |
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11/14/2008 01:14:20 PM · #9 |
| Give a discount according to the circumstance or discretion - but don't lower the prices... |
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11/14/2008 01:17:17 PM · #10 |
Originally posted by Kavey:
I would find a way to politely remind him that each of you bring different strengths, skills and expertise to the partnership and that the one with the marketing expertise is your sister. I'm assuming her marketing knowledge includes merchandising too?
On a more general level you need to agree upfront how disagreements about the business are going to be resolved? Will it be by majority vote? Will it be a case of giving each of you a directorial responsibility for different areas of the business, and for those areas you've been assigned, you consult the others but have ultimate decision? |
I think it necessary to establish a clear order of responsibilities to resort to when consensus cannot be achieved. Consensus, however, should be the first goal. To achieve it, the proponent needs to make every possibly effort to sell his/her point of view to the partners.
To make your case, I would show that
a) price represents value
b) you're not in the money business; you sell goods and services. Ergo, it would be healthy to assume that your clients value the product/service higher than cost
c) (and, if you're not getting anywhere via a) and b)) consider to offer more product/service without having to adjust the price and opening an option to even increase profits by raising prices, as value and demand increase
d) It is generally easier and far more credible to raise prices incrementally than significantly. In other words, most people are willing to accept a reasonable increase in cost. It is much harder and less credible to do this after a price cut. |
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11/14/2008 01:37:29 PM · #11 |
Originally posted by zeuszen:
Originally posted by Kavey:
I would find a way to politely remind him that each of you bring different strengths, skills and expertise to the partnership and that the one with the marketing expertise is your sister. I'm assuming her marketing knowledge includes merchandising too?
On a more general level you need to agree upfront how disagreements about the business are going to be resolved? Will it be by majority vote? Will it be a case of giving each of you a directorial responsibility for different areas of the business, and for those areas you've been assigned, you consult the others but have ultimate decision? |
I think it necessary to establish a clear order of responsibilities to resort to when consensus cannot be achieved. Consensus, however, should be the first goal. To achieve it, the proponent needs to make every possibly effort to sell his/her point of view to the partners.
To make your case, I would show that
a) price represents value
b) you're not in the money business; you sell goods and services. Ergo, it would be healthy to assume that your clients value the product/service higher than cost
c) (and, if you're not getting anywhere via a) and b)) consider to offer more product/service without having to adjust the price and opening an option to even increase profits by raising prices, as value and demand increase
d) It is generally easier and far more credible to raise prices incrementally than significantly. In other words, most people are willing to accept a reasonable increase in cost. It is much harder and less credible to do this after a price cut. |
Well, luckily, the price cut wasn't made public. We were EXTREMELY low for the first month as we were mostly shooting friends and family. Then, when word got out, sis and I thought it was time to raise it. Bro thought this was too high so it got lowered before we posted it... but still higher than it was. So, all is good. I just mainly needed some good arguments for the next small jump. I'm guessing it's going to be hard to convince as he still thinks we are too high [in price]. Your suggestions were perfect.
Message edited by author 2008-11-14 13:38:29. |
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11/14/2008 01:40:23 PM · #12 |
| What does your business plan say? |
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11/14/2008 01:46:56 PM · #13 |
Originally posted by cynthiann:
Originally posted by karmat:
If people are buying them, why change? If they are not, you may need to ask why. Quality obviously isn't an issue. |
They used to be a lot lower until sis and I upped them recently. What I posted was the compromise we came up with her husband just before posting all the Santa pics yesterday afternoon. They were a few dollars more. Whether they sell or not still remains to be seen. I imagine they will... and would have at our slightly higher prices. |
I wouldn't change them at all. Honestly they seem pretty fair (even a bit low), although I don't know your particular market.
I am going to relate another camera store story: The camera store I worked in had the second highest price in town. But, we were the best in town. Our volume was twice what our half priced competitors . We offered bulk (ten rolls or more) discounts, and seasonal coupons as well as occasional in store deals. The discounts were more to make our regular customers happy (which it did). The specials rarely brought in new customers. About eight months before I left the store we upped processing prices by a $1 per roll (doesn't sound like much but when you average 300 rolls per day it adds up big over a year), we didn't lose a single customer.
One thing I learned working retail. Its easier to raise prices, and then lower them backif need be, than to lower them and try to raise them back. The oil companies have it figured out real well. Jack up the prices to the moon, then lower them back down a few months later, keeping them 25% higher than before, and people will rejoice at the new "lower" prices. |
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11/14/2008 01:48:06 PM · #14 |
also... think of the type of customers you want coming in the door... sure you can sell lots of cheap photos... you could be like walmart or sears... if that's what you want.
If you want to be a cut above that though, you'll also have to price yourself a cut above... |
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11/14/2008 02:48:43 PM · #15 |
//www.stacyreeves.com/greatestpricingguideever.pdf
While it's geared more toward weddings it will give you some background on how to figure out what to charge.
You need to know your costs - rent, insurance, etc.
What you three want(or need) to be paid.
What your products cost.
Then you have to guess at how many sessions you'll have.
If your costs are $30,000 a year and you want paid $25,000 each then that's $105,000.
If you figure to do 20 sessions a week, every week of the year (some weeks will be slower, some busier so be realistic with this number). That's 1,000 sessions in a year.
TO make $105,000 on 1000 sessions you need to CLEAR $105 per session, on average. So if the average person is buying 5 or more sheets at $20 per you would be fine (but you'll need to use YOUR numbers for this).
If you are as good or better than the competition, why are you not charging the same or more?
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11/14/2008 04:39:22 PM · #16 |
So lower the prices and then say because of the reduced revenue you have to lay off one of the partners... do so and then reaise back up. ;D
Prices depend a lot on local economics and who you are marketing too. Someone selling in Hollywood, Calf. very cheaply is still going to be a lot higher than someone selling in Detroit right after GM closes their plants down. Different parts of the country have different levels of pricing, which doesn't mean you can't still sell your prints at Hollywood prices in a ghost town, it just means it's going to cost you more to attract the people that are willing to pay the bigger bucks.
Your prices are on the low side, unless you are bringing in a lot of customers. If you are bringing in lots of customers, double your prices, lose about a third of your customers but still bring in more money with less work. Then use the extra time to attract more customers. If you aren't bringing in a lot of customers, double your prices anyway. This will attract the different group of people... those that see high prices as a sign of quality and value or they see low prices equate to cheap and lesser quality products.
Mike
Message edited by author 2008-11-14 16:39:47.
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