On photography pricing and group deals

We had a really interesting discussion on Twitter this morning about professional portrait photography rates, and I thought it was one of those conversations that would be interesting to port over here to the blog.

You know those daily coupon deals, like Groupon and Living Social and Kahoot and the rest of them? I think I get a dozen or so of them every day, and while I’ve found some awesome deals (like a free membership to the Museum of Civilization, and half-price meals at East Side Marios) most of them I delete. A few of them I snicker first and then delete. And some just make me go “Hmmmm.” There was one today from a local photographer who was offering a $120 photo package for $40. Included in the package was “One-Hour Photo Shoot, One-8×10 Print, Two-5×7 Prints, Four-4×6 Prints and 16 Wallet Prints and a Digital CD of all Photo’s” (sic). And I thought, “Seriously?”

So I mentioned it on twitter, and all my photographer friends said, “I know, isn’t that insane?” while all my non-photographer friends said things like, “Well, it’s probably good for exposure and building a client base”. And I’m sure a few people thought, “Photography is ridiculously expensive, what nerve they have charging that much.”

454:1000 Old guard versus young whippersnapper

So let’s look at the deal from the photographer’s perspective. Those deal networks aren’t free — Groupon takes up to 50% of the fee, from what I’ve heard, and the others take in the range of 25% to 30%. For ease of counting, let’s assume they take 25% off the top, which leaves the photographer with $30.

For that $30, here’s what the photographer has to do: get in contact with the client and set up an appointment, show up with all of his/her gear (or have the available studio space, which adds huge overhead), spend an hour taking pictures and say another half hour getting there and back. That’s at bare minimum two hours, or $15 per hour.

It takes me about four hours to sort through the pictures from a session, select the best ones and polish them up. (Caveat: this is my favourite part, and I linger over it. So let’s say for the sake of argument the photographer is super-speedy and can do it in two hours.) So now we’re up to four hours, or $7.50 per hour. And then you have to contact the client again for the image selection process. You either create an online gallery, or sit in front of your computer with them, or at bare and unprofessional minimum, e-mail the low-res files to them. Another hour of work. And then the client picks their faves, and you have to prepare and submit them for printing. Even at Costco’s rates, you’re looking at $10 worth of printing. So that’s $20 divided by five hours, which is $4 per hour.

And THEN you have to think about taxes (say 30%) and equipment (say another 30%). You’re at less than $2 per hour now. Realistically, I think you’re actually at a huge loss by the time you’re done, and this doesn’t even address the opportunity cost of your time as you work with all these cheap clients when you could be drumming up business with paying clients — or working at McDonalds, for five times the hourly income. And you’ve given away the digital negatives, so that client has no reason to ever come back to you for future prints and lord knows what they’ll do to the images.

So the discount deal is obviously at the ridiculously cheap (and, IMHO, ultimately worthless) end of the spectrum. Sure, the photographer may build some clients, but they’ll likely want the $40 deal next time. And I think the photographer undervalues him or herself by setting prices too low. And I genuinely believe there’s an argument to be made that it devalues the profession of photography as a whole.

I’m very lucky. I’m not making my living at this, so I have nothing to lose except my time, and I still wouldn’t devalue myself like that. I have to admit, when I first saw the going rates for professional family photography, I balked at first too. Why would someone pay $150 just for a session fee when you can get a portrait package at Loblaws for $45? I only have to look at the packages I’ve bought from Loblaws over the years to know the answer to that one. It’s like the old $10 haircut — you only have to get one once to realize that you really do get what you pay for. Some people are totally happy with a $10 haircut and more power to them, but it’s something that’s important enough to me that I invest in it. It’s worth it to me.

Pricing photography is a minefield right now. You price yourself too high and the phone doesn’t ring, but you price yourself too low and you get plenty of calls — but find yourself working for peanuts, run ragged and barely able to pay your bills.

Of course, this issue is not limited to photography. We’ve had four contractors come through the house to give estimates the repair the drywall we pulled out of Tristan’s room. Two of the first three were plenty affordable, and they would have happily slapped up some drywall for us. But the one who quoted us the highest (by a considerable amount) price also seemed to really know what he was talking about. He offered insight and advice and opinion. And we’re going with him for exactly that reason, because his prices speak to the quality of his work.

So what do you think? On twitter, the photography crowd was unanimous in their disapproval of this kind of drastic price reduction, and agreed that while there is plenty of room for specials and promos, this cut-to-the-bone approach would ultimately be counterproductive. I’m curious as to what you think!

Edited to add: apparently this is hardly an original thought, right down to the McDonalds analogy: http://thebusinesslens.com/2010/09/15/groupon-photography-sessions-vs-working-mcdonalds/

Author: DaniGirl

Canadian. storyteller, photographer, mom to 3. Professional dilettante.

30 thoughts on “On photography pricing and group deals”

  1. I think you’ve hit the nail on the head in this post Dani. The saying “You get what you pay for” is applicable in every other service or product a person purchases. I’m not sure how anyone can think photography is any different!?

    I wish the general public understood the time, skill and care that went into a custom photography session. The issue is that SO many people are undercharging, and setting up daily deals like this, its creating the illusion that there really isn’t that much work involved (which ultimately makes it difficult for professionals to charge fair prices for their work). Thanks for breaking it down the way you have. I hope it reaches a lot of people. 🙂

  2. I agree, this basement-level pricing is counter productive in so many ways.

    Pricing is a tough call. I too am doing photography on the side, and pricing is a big issue to contend with. With the ready availability of digital cameras these days, everyone thinks they can do it. So when you (or I) say what the price is, they think I’m insane. Its only an hour for a shoot. Yeah, its all the time *after*. As you mentioned, four hours. I find the post processing/selection is usually double what the actual shoot time was. And then there is the cost of equipment. I have pro-level gear, not the $200 P&S camera. I have lights and other equipment.

    There is also the undercutting issue. By lowering the price so low as to undermine real (really good) photographers. I can lower prices a bit because I also have another job, but I also want to earn what I think my time for this is worth. I also don’t mind being a bit lower to boost my portfolio and client-base, and slowly raise prices as work increases. There have been some very vocal big-name pros weighing in on this thing – Zac Arias is one – on shooting low on price. Wedding photographer Jasmine Star also has touched on this.

    In the end, I’m all for getting what you pay for. This little ditty does a good job of explaining why wedding photographers are expensive, but I think it covers any photographer.


  3. I COMPLETELY agree with your thoughts on this! I always tell my interns/assistants not to under-value themselves. It not only ruins their reputation, but the reputation of the industry as a whole. I don’t mind someone with less experience than me pricing themselves lower than me, as long as they go so low that it doesn’t make any sense.
    I saw a WagJag ad recently by a “photographer” in Toronto. His post said he normally charges about $300 for a on-site family photo session, but was offering it on WagJag for $50! This included travel to the client’s home or other location of their choosing, post-processing, and large print, and all the digital images on a CD. When last I looked weeks ago he had 50-100 families signed up. Even if he was able to keep 100% of the fee, he would make a grand total of about $5000 and would have to run around for months to get 100 photo shoots completed. This probably won’t even cover the cost of gas to get to all the shoots! And, you’re right, these aren’t the type of clients you want anyway. They are never going to pay $300 for another shoot in the future.
    All in all, it is incredibly stupid to price yourself that low. Thanks for your post,
    — John

  4. I saw this deal, and even as a consumer I thought it was insane. For all the reasons you stated, I would never purchase such an offer. As much as I love a bargain I believe you get what you pay for, and to me this says I’m getting a person with zero training who is going to rush me and not give me their best work. I have no experience with this particular photographer and don’t mean to slam them, that’s just my first impression from the offer. Even at the full price of $120 I get prints plus digital negatives? Too good to be true. *delete*

  5. Hi there,
    I think it’s really difficult for people who provide services (as opposed to products) to participate in these group deals. You can calculate the actual cost of a cupcake or tires or a chair. But the value of a service is really in the eye of the customer.

    I don’t know much about photography so I’ll use the example of my industry. I’m a fee-only financial planner. I don’t sell investments or insurance or any other “product”. I sell my ability to help clients achieve their financial goals. It’s a service and my fees start at $125/hour.

    I would never participate in one of these group deals because I don’t want people to have the perception that the “value” of my service may not be $125/hour. I used to discount my fee as a referral tool, but I don’t do that anymore. I do have a referral program, but it is not related to the fee I charge.

    There are a 100 reasons why someone who sells a “product” might want to participate in a group discount. Maybe they got a deal on the ingredients or they need to reduce their older inventory to bring in new designs. But I think anyone who provides a service might want to take a 2nd look as to whether the group discount program is good use of their advertising $$ and what the impact to the perception of the value of their service might be. Just my 2 cents worth..

  6. I actually used my photo blog to sign in this time instead of my personal one… 😉

    I’m not sure which coupon you’re referring to, or which photog (but I’m nosy, so send me the link, will ya??), but that’s a ridiculous price. Is this person established already? Just starting out?

    I know when I started (almost by accident), my sessions were free and I just gave the disc of images. It helped me build my portfolio and learn, however. And it was for friends!

    When I did start charging it was $200 per session (family, newborn, etc) and I still gave the disc. Now it’s up to $300 per session which includes a $50 print credit and the disc once they place an order.

    I know the “giving away” the digital negatives is also another touchy subject among photographers. My reasoning is that I’d rather my clients have all the images to use and love instead of them sitting on my computer. Since I put a lot of work into them, I want them to be seen. Kind of a “if a tree falls in the forest” type situation. By including a print credit (of which I still take at least $40 as profit), and by stressing to my clients how much better xyz print house is compared to Walmart/Costco/etc, they always -ALWAYS- end up ordering more than the $50. Generally I make about $400 per session and I’m happy with that.

    What I don’t agree with is when photographers base another’s worth/experience/talent/ability ON their pricing. I could list off several photogs who charge far more than me and I think their work is less than impressive (to put it diplomatically).

    I also don’t agree with how some calculate the “cost” of photography… Considering all these thing: gas, mileage, cost of equipment, cost of software, studio cost/cost of living, marketing, website design/hosting, etc, etc.

    – Well photog A might drive a huge SUV, while photog B drives a hybrid.
    – photog A might have a very local client base, while photog B travels upwards of an hour each direction for sessions
    – photog A might be a total gear head with all the newest pro equipment, while photog B shoots with a Nikon d40 (*wink*)
    – photog A might shoot with only available natural light, while photog B uses all the best flashes/strobes/boxes known to man
    – photog A might own a huge home with studio in Rockcliff, while photog B lives in a semi-detached in Gatineau
    – photog A might solely use blogger for online presence, while photog B has a full designed/hosted/whatever site with shopping car, etc, that costs several hundreds a year

    You get the picture (pardon the pun).

    No two photographers are going to have the same “overhead” and I think that should be taken into account when critiquing another’s pricing. If I use old equipment, don’t travel far, don’t use PS, place one $30 order of moo cards each year and use a free blogging platform, my “costs” will be far below the next guy. I don’t feel I need to raise my prices to account for other people’s higher mortgages, bigger cars, or need to buy new camera bodies each year.

    I know this has veered a bit from the coupon discussion, but I guess I’ve been thinking about this a lot since said conversation on Flickr. And all this being said, I understand that those who DO need to make a living off their photography are going to feel not only differently than me, but also very strongly about this all.

  7. As much as I love Groupon and the coupon sites as a consumer, as a business owner I have to wonder how good the deal really is. I see so many of the “deals” that you mention above and yes it is a deal for the buyer but the potential to ruin (OH YEAH RUIN, harsh words) a small business is huge. The groupon strips away any margin of profitability and could overwhelm the business into a customer service disaster if not managed properly or prepared for well in advance to handle potential volume. Think of the photographer like yourself, or the hair salon who is giving away cut and foils for what amounts to 10 bucks or the spa that gives away treatments for 25 bucks to over 1000 lucky coupon buyers. If I put my business coaching hat on I say don’t do it. The groupon may get you exposure but you will also be exposed to customers who are not your target and ones you may not otherwise want to attract, the dealers, the tire kickers and low ballers. For the small amount of referrals and repeat business at regular rates you will get, my advice is don’t do it.

    Will I buy a groupon in the future…hell ya! I just won’t offer one.

  8. Great article, thanks for this. I recently did a Group buying option with my photography business (which is well-established) and certainly agree with many points! On the surface it sounds like a great idea- hundreds of new clients, who will all tell their friends and come back time after time? Great! However, in the end, I’m running my butt off for about $25 a shoot- and a huge chunk of my time is taken up from this offer. It’s really given me a sense of what my time is truly worth.

  9. As a photographer that both believes in not devaluing your work and believes that there is a way to run with these specials, I must say that your blog post if great Dani.

    I have, in the past run one of these specials, I did not go as low as that photog today and I did not, nor do to I ever include a full-res cd of images (they are available for purchase only). For me, the special I ran went quite well, although my actual session fee was low, the after sales were incredible and in the end I received great word of mouth from the people who bought my special. For me it worked out in a win/win but it is not for everyone and there is a way to do it.

    One studio in Ottawa that has been around for at least 30 years ran a Groupon around Christmas, that studio sold 1500 (or more, can’t remember the exact number) sessions for $40 and gave the clients five months to use the coupon. So imagine, this studio fitting in all these families in five months while keeping their extremely well established business going. Not sure, but that certainly didn’t make sense to me.

    The best thing you said in your post that struck a cord with me was,
    “I have to admit, when I first saw the going rates for professional family photography, I balked at first too. Why would someone pay $150 just for a session fee when you can get a portrait package at Loblaws for $45? I only have to look at the packages I’ve bought from Loblaws over the years to know the answer to that one.” This is what we, as professionals, have been trying to tell people for years. Lets keep spreading the word.

  10. The business model of Groupon works great if you have a high carying cost and low variable cost. E.g Restaurant, Hotel, Museum. You are paying the bills even if no one is there. If I had a new Restaurant and it was sitting empty I would totaly do a Groupon. The beauty is that you pay for advertising with merchandize. Basiacly barter. (compared to a full page newspaper add that may bring in no one)

    On the other hand if you have a low fixed cost and high variable cost Groupon is the worst thing you could do as it will put you under water as is listed above. Anyone can sell a dollar for 50 cents.

    Know your business and how you make money.

  11. I’m enjoying the discussion.

    One thing that needs to be factored into the equation is the percentage of Groupon (or other site) deals which are actually redeemed. Just as with gift cards, there must be some which go unredeemed, and if the rates are generally high enough that would subsidize those services which the business does end up providing.

  12. @Marianne
    I can’t speak to the non-used (breakage) in Groupon but the industry standard for gift cards is 10%

  13. Not so sure all the assumptions being made hold true. For instance, it’s very unlikely that the photographer will spend any time booking appts. In fact, probably they expect and hope that a certain % will not use their coupon by the expiry date. This changes the calculations right off the bat. I would also be very surprised to find that the photographer makes house calls. If they have a studio, it isn’t exactly fair to use that for setting the price though. Like the museum example someone mentionned above, this is actually a sunk cost. The photographer has to pay for their space even if it is sitting empty.

    And hey, maybe they are like my friend who happens to have a print quality printer taking up half his basement. Submitting prints for him is way under Costco pricing and timewise he has it down to a science. So I guess what I’m saying is to be careful of assuming you know how much something will cost someone else (or how long it will take them!)

    It could be too that the expected referral effects make offering a loss leader worthwhile.

    Of course, it could also be the flip side. Many many people place no value on their time. I remember a meeting once where we talked about the various services we could provide to the business owner, and every other sentence his second in command chirped: “I can do that… For FREE!!!”. It was comical but depressing because the second in command clearly didn’t get that the business was actually paying him executive wages to do minimum wage type

    Speculating which category the photographer in question falls into is interesting though. Too bad we aren’t likely to hear directly what the hoped for goal was and (later) whether they reach said goal. I hope for their sake that they do!

  14. Wow, I have really enjoyed these comments! I was taking care of five kids for a lot of the day yesterday, so was peeking in from my phone and following along all day.

    I like how the conversation has branched out to the entrepreneurial side, as I think a lot of people who start up a photography business maybe don’t take the time to really think out the business planning side of things.

    Amy, you raise a good point that each person has individual costs, but I think you underestimate yourself if you don’t take them into account. Pennies add up to dollars over the long run, and if you’re really doing it for money instead of love, you need to take that into account. (I think we both fall farther into the “love” end of the spectrum!)

    Mary, of course the photographer has to book the appointments. Who else would do it? And even if you own a printer, you had to pay for it at some point, and you have to pay for ink and paper. I’d say the family photography business right now is about half and half on in-studio versus on location. Having said all that, I suppose that yes, they do hope a certain number never redeem their coupons, but that’s a heck of a gamble.

    So interesting to hear the various perspectives on this — thanks to everyone who took the time to comment and tweet! I think this is one of my most FB “liked” posts ever!

  15. I have run into these kinds of issues as a writer/editor and shake my head when I see “deals” of this sort. I agree that It devalues the craft involved, as well as the time of the person doing the work.

    Great discussion and interesting read. Thanks for posting on the blog for us non-Twitter folk.

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