Determining Your Value & How Much To Charge

By Paul Hofman.

Let me start this article by stating the obvious: This is not a new debate. This is not meant to be the Oracle’s answer to all things as they may relate to pricing photography and photographic services or, for that matter, even an attempt at it. What this article is meant to be, is a look at some of the issues that that have faced us in the past and how those issues are still relevant today and how they may impact on us and our industry tomorrow, with perhaps a few added nuances.

I do realise in writing this article that I am reaching people who work in specific areas of photography and that not all issues may be relevant to that particular genre so, I ask you please to indulge any cross references or areas that are specific to you or not but, to look at it from a helicopter view of issues that affect us all.

So let’s revisit the question: How do we price our work? There are a number of ways in which we can do this and some have merit, application and sustainability, others don’t. Anyway, we will work it out soon enough. One hopes!  (The issue of  pricing photographic prints and artworks will be dealt with in a future post specifically looking at the protocols and intricacies of pricing, art houses and galleries. For now we focus on the aspects of commercial photography.)

Listed below are a few ways we can look at it:

• We can have a look at what other photographers are charging and make assumptions as to what we might be able to “get away” with by association. Also referred to as the “thumbsuck method”. Not an exact science and it can often be a hit-and-miss process.
• We can work to the rates that are set by ad agencies, production companies, media houses and other purveyors of work opportunities. Not anywhere near what would constitute fair value in respect of editorials and magazine work. Ad agency and production company work rates will vary according to budgets, product and client and in some of the bigger agencies there is fair value. Some of the smaller agencies may pull the “No Budget” poverty trick – not all, but some may put this into the mix. This is, however, sometimes a route to other more profitable work and to get known as a photographer in the industry. Sometimes, but not always.
• We can work at the rates that are set out by professional photographic bodies and associations whose purpose it is or should be to set guidelines in respect of rates, charges for services and other relevant and manageable costs in the delivery of photographic services. The Professional Photographers Association of South Africa (PPSA) is one such body. Unfortunately, they have not done much in the past decade to address any of these issues (in my personal opinion and that of a few other professionals, of course). A website that is of value and that has over the years tried to provide some modicum of guidance is APPA. This site is maintained by Deryck van Steenderen at his own cost. He and others have been prolific in keeping on top of issues as they affect pricing, usage and copyright at eye level. We will take a more in-depth look at copyright and how it may affect pricing in a later section of the series.
• We can undercut our competition by charging ridiculously low rates and for a while, get work that should have otherwise gone to another photographer or  other photographers who are better equipped to deliver a superior product, but are negated from the process due to pricing. This seems to be a common practice and a very dangerous one. Dangerous for both parties because it is not a sustainable model and moreover, the photographer producing the work has probably got inadequate skills to deliver a proper result. It is dangerous for the client because their product can be associated with “cheap and nasty” work and thereby convey the wrong message to potential customers. This is another issue that will be dealt with later on in the series.
• We can work for free, give our work away and get lots of credits, by-lines and cheap referrals and by this I mean, people sending their mates and associates to us to do things for free. Well hey, because we are just such great people and are always willing to “do a favour.” Let us not fool ourselves here folks, we are nothing prostituting our photography. No lavish hotels for us just the back seat of the car, if we are lucky. “Wham, bam and screw the thank you’s.” The days will come when they have had their way with us and we will be cast aside for “fresher meat”. This is the area that I believe deserves our urgent attention and an issue that will also be revisited later on.
• We as the photographer or owner of the business can do a calculated assessment of the capital expenditure (capex) to get the business up and running. Add to that an accurate assessment of the expected running costs of the business and then add to that some modicum of mark up that is equal to profit. That is the stuff that we put in the bank and use to pay for our lavish lifestyle… Yeah, right.

This last process is applied as follows:

• The total running costs of the business, including capex are then divided by the number of working days in a month or the number of days that you want to work in a given month. This gives you your daily rate or the amount that you need to charge your time at to cover your expenses.  You can then break it down into half day and hourly rates at a percentage of the daily rate.
• The cost of cameras, computers, software packages and the like is covered by the application of a Digital Image Capture rate. These rates will vary according to the subject being shot and the cost of producing an image. You could also include the cost of basic processing and image processing into this rate.
• All outsourced services or “hard costs” should also be factored into the pricing of the shoot at a margin that covers the time of sourcing, collecting and returning to the hire company. This is known as a handling fee and can vary from 15-25%. If lighting has been purchased and owned by the business, calculate the cost per hour of usage that will recover the cost over the period of depreciation.
• Travel can be calculated using AA rates applicable to the make and model of car driven.

This methodology of calculating the rates that clients are charged for services rendered is easily communicated to anyone who questions how the rates were derived. It provides for a transparency in the elements that make up the expenses recoverable and the profits or losses that are being made. It is more detailed and elaborate than some of the other methodologies employed in deriving photographic pricing. However, this is the correct way to price your services and it should be the preferred way to all of us so that we can indeed cater for profits and perhaps retirement one day. Even if it is just to the granny flat on the property that you had to sell to your son and his darling wife. Bear in mind that there will still need to be some comparisons and adjustments to get in line with what the market is doing, these could be minor tweaks or they could be large differences at which point a decision needs to be made. “Is this an area of photography, or is this client viable/going to profitable?”

Right on, brothers and sista’s! So now we are all a little jazzed up and we have a bit of info, next question: How do we place value our own work?

Well again there are a few ways to approach this matter. A caveat if I may, “If you do not value your work, nobody else will.” I use this as a preface in any discussion I have on the subject and over the years I have tried to instil this idea in the minds of students that I have interacted with and in the minds of my peers and contemporaries. So let as look at a few ways in which we can try and do this.

• We can ascertain what the final product is going to be used for. Advertising, marketing, brochures, catalogues, media profiling, social media, magazine editorial, product advertorial, etc. Each of these applications has a different value add to the client.  There are some guidelines that can be applied in terms of usage charts that determine additional payment for extended use of the images. These apply in the main to product marketing and advertising.  Social media, editorial and PR images are generally paid for at a once-off rate based on an hourly rate and a small fee for processing and burning to disc. These rates are relatively low and don’t vary very much from media house to media house. This is referred to as usage value.
• Value can also be determined by the demand that a certain photographer may enjoy in the industry. If a photographer’s work is in demand, a higher than normal rate may be paid to have their work feature in a magazine, periodical or have them shoot an advertising campaign. For example. Annie Liebowitz, Mario Testino and a few other big names will have far greater appeal than the everyday photographer. This is called market driven value.
• Then there is the one that we all suck at – well, okay, a lot of us suck at, and that is negotiation. A lot of us feel that we are above chasing money and that we are essentially artists and want to concentrate on the production of fabulous work. Moreover, we feel guilty asking for money because we actually enjoy what we do and asking for money is a little odd. Okay, so let’s all just get over ourselves or get an agent, but this can backfire as well, so choose wisely.
• Primarily value in photography boils down to, as everything else, supply and demand. If a photographer’s product is in high demand and there is limited opportunity to acquire his/her product, higher value will be attributed to their work and in turn higher prices will be paid for their services and vice versa.

These are two critical areas in the photographic process that get the least attention until it is too late. Over the years that I have been involved with academia, I have found this to be the subject that students are the least equipped to deal with.

Please feel free to comment, ask questions and request specific attention to any aspect of this discussion and I will do my best to provide the requisite response.  I hope that this brief article has at least tweaked your interest and made you think… Even just a little bit!

Article written by Paul Hofman.