Using quick pricing equations to calculate product pricing might be convenient, but it can potentially lead to issues with your bottom line. There are so moving parts when it comes to helping photographers and creatives come up with their business’ pricing strategy, not to mention that every business is different. Whether you’re putting together product pricing for the first time, or just making some tweaks, here are 5 tips to ensure your pricing is both accurate and sustainable.
1 - Know ALL of your product costs
Sometimes photographers will look at the cost of an album and multiply that by three, but that may not be the total expense. What about shipping? Packaging? Do you get the albums shipped to you and wrap them in your beautiful custom packaging with a care card? If so, that all becomes part of your product cost. Do you have a buffer in case a printing error or damage? All of these items must be considered when you’re looking at your price and margin.
2 - Your TIME has value
The problem doing a one size fits all pricing equation is that it may not be indicative of the time spent on each product. If you’re able to find an inexpensive frame kit, but it takes you 3 hours to assemble it yourself, you may actually be losing money by just transferring your monetary discount cost on to the customer.
3 - KISS (keep it simple, sister)
Limit your product offerings to 3-4 products and limited styles per product; for example, prints, framed prints, folio boxes, and albums. You know that feeling when you walk into Ikea without knowing exactly what you’re looking for, and you end up getting so overwhelmed by the options that you either walk out with nothing or you walk out with 20 different things but nothing that you were originally looking to buy? That’s how your clients feel when you offer too much. Limiting your product options not only makes it easier for your customers, it also makes it easier for you. Fewer vendors make it easier to keep track of orders and invoices.
4 - Know YOUR market
We can’t tell you how often we reiterate this one piece of advice to so many different creatives that we work with. Understanding your target market is important for product pricing, but for marketing and growth strategy as well. It’s critical to know what products your target client is excited about. If your clients love traditional frames and think canvases are meh, don’t bother with canvases. While limiting your offers may seem counterintuitive, if you’re doing it strategically, it actually makes your business more appealing, and makes your life easier.
5 - Make it MAKE SENSE
While you’re setting your prices make sure you continually take a step back and are making sure the final pricing menu makes sense to your audience. What are the rate increases saying to the customers looking at them? If a lower level album costs $600 and the next “upgrade” costs $2,200, that’s potentially pretty jarring when looking at a pricing list. Can you explain the gap in the title or description of each album (maybe the $600 album is a “mini parent album” or a “signature/sign-in book”), or do you need to just get rid of one of the options?
When looking through various resources, spreadsheets, and vendor costs, you can easily start to feel intimidated by making your own pricing work. All the nuances and moving pieces can get overwhelming, stressful, and difficult to keep track of. As a business, there is some level of responsibility to ensure that you are pricing products (and services) correctly. This not only makes your individual business more sustainable but ensures that the industry as a whole will be able to thrive. As you’re growing your business and thinking about the products that you’re going to add or offer your clients, keep these 5 tips in mind. They’ll not only help you to organize the chaos, you’ll be sure that the products you offer are a profitable venture.
Breaking the association between ARTIST and STARVING, that’s Homeroom’s sole mission. After running her own photography business for half a decade, Courtney decided to hit the books and get her MBA, and that’s where Homeroom was born. Homeroom (and Courtney) are based out of Portland, OR, but offer workshops and one-on-one consultation for creatives all over the country. Bridging the gap between the business world and the creative industry; with each service, they not only provide unparalleled content, but they also make sure each attendee is able to tailor that content to their own business.