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How To Price Portrait Photography To Make Money

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How To Price Portrait Photography To Make Money

How To Price Portrait Photography? Words of Advice from a Professional Photographer

As a general observation, I am shocked at the low prices of a lot of portrait photographers – especially new photographers, and I hope this isn’t offensive to anyone, but what is more important than your photography, is your business skills when running a business.  This industry is completely saturated with under priced photographers – many talented.  Think of this — the stats are something like 95% of all photography businesses fail.  What makes you feel that you should be in that 5% that does not fail?

Business sense, that’s what.  Have you marveled at a local photographer who does really boring work, yet they are always busy and their prices are more than yours?  Why is that person a success and you can barely bring people in even though you are always hearing how everyone loves your work…  It’s because he/she knows how to run a business.

Everyone asks – how should I price my portrait photography?  So and so has $25 8x10s, so I can’t go higher than that.  Okay, so research all the local portrait photographers and find out what they are charging.  Use that as a guide, but understand, many photographers do not have their pricing on their site, and there is a reason for that.  You need to price yourself for profit.  If you are new and still portfolio building, something that is great to do is set your prices based on turning a profit (as I will describe below), then sure, discount your prices and be CLEAR that you are portfolio building.  That way, when you are done portfolio building, you can return to your already advertised REAL prices, and you won’t make your previous customers angry because they knew at some point you would move on to them.  The problem with starting too low is when you start realizing you aren’t turning a profit, and you start to raise them, you are going to be without business because people will get angry with you for raising them.  So be honest and upfront and clear about what exactly is going on, and you will continue to have clients who have built a relationship with you and understand what’s going on.  Don’t drop a bomb on them, by any means.  Once they have invested with you, they are invested, it’s a relationship, maintain it.

Another thing – if you do not need the money right now because your spouse is the breadwinner, now is a GREAT TIME to build an exclusiveness about your business.  You don’t need the money, so why not price yourself to make it well worth it.  So you get a few sessions a month.  You are PAID WELL for your time away from your family, and then as word of mouth builds, you are viewed as a higher priced, more exclusive portrait photographer – and that can be quite desiring for many crowds.

The thing about running a business – you have to take emotions out of it.  By emotions, I mean “I want people to still be able to afford me” “I don’t think I am good enough” “I’ve never done this before” “I can’t afford me (I beg to differ – how much did you spend on your living room furniture?  $3,000?  How much did you spend on that big screen TV with surround sound?  I have news for you – pictures last longer and are more important in the longrun.  Clients will not value your work, if YOU don’t value it.  News Flash:  WalMart’s a la carte pricing is $50 for an 8×10.  I’m not talking about the coupons.  I’m talking about for one of those crappy ugly 8×10 a la carte backdrop pictures of your child with a fake Christmas tree, where you only got 15 minutes to get your child to smile printed on substandard photo paper is $50.  You offer WAY better than that to your clients, don’t you?

Jodie Otte

When I see some charging $200 and that includes all the digital files or even some of the files or even a $100 print credit with $20 8x10s, I cringe because that photographer can be making less than minimum wage and has no idea.

Do you have a reason for pricing the way you do? Do you just toss it out there and hope for the best? Or do you have concrete logical reasoning for why you are pricing the way you are.  You need to take your EMOTIONS out of this and think like a business owner.  No business owner should be making less than minimum wage. You really need to think about business management (classes would be a great idea).

So how do you price?  Work backwards to figure out what clients need to spend.  So many people want to skim over this because they are “arteests” and think it’s all about the talent, not about the pricing structure.  WRONG!  Artists work from emotions, and you better step outside of that for a moment and keep those emotions and business separated, or you will BE a starving artist who will one day look back and say “my kids are grown, where did the time go?  I sat in front of that computer for hours for less than minimum wage… I wish I had that time back with my kids….”  No one looks back and says “I wish I would have worked more away from my family….”

Ask yourself how much you want to make per year. My personal goal is always well into six figures, but I’ll back this down to a more reasonable goal for newbies.

Okay – let’s say you want $50,000 SALARY for a full time BUSINESS OWNER.   When figuring this out – what do you value your family time at?  $50 an hour?  $100 an hour?  $10 an hour (REALLY????  You may regret that one day years in the future – don’t set yourself up for regrets)  Don’t laugh – some people do this for $10/hour and then pay a babysitter $5/hour.  It boggles my mind.

Work backwards to figure out your pricing structure.

1.  Income desired is $50,000.  Again, you are a business owner, you don’t need to be working for pennies.  Add 35% to that (that’s for your taxes as a sole proprietor). Yes, you need an additional $17,500 to cover your taxes.  So now your income has to be $67,500 as you are going to owe Uncle Sam a nice chunk.

2. Add your expenses to your desired income – $67,500 plus $25,000 equals $92,500 -Don’t think $25,000 is a lot for business expenses. That’s not a lot at all. Last year alone, my expenses were $70,000.  Expenses means everything – gas money or mileage, office supplies (paper, ink, packaging, file folders, pens, pencils, envelopes, sticky notes, light bulbs, batteries, whatever….etc.), office equipment (computers, software, actions, mouse, keyboard, file cabinets, books, internet etc. etc. etc.), studio supplies and equipment if applicable, portions of gas and electric bills, telephone bills (if working out of home, it’s portions of this vs. full amounts if you have a studio) photography supplies and equipment (cameras, lenses, memory cards, lens cleaning supplies, flash, strobe, softbox, camera bags etc. etc.), packaging supplies (bags, boxes, bows, tape, labels, etc.), postage, props -yes, all those baskets, newborn hats, wraps, backgrounds, chairs, stools, etc., marketing supplies – print samples, business cards, etc. oh and your business insurance.  Do you have studio rent?  Then think much more than $25,000 as expenses.  The figure I am using is based on not having a studio – and I am being nice, most with even part time businesses have higher expenses than $25,000.

3. So you need to bring in $92,500 in sales every year to get your desired income of $50,000. How do we go about that? Okay, ask yourself – how many weeks per year do you want to work? Let’s say 48 weeks per year (don’t forget, you may have your kids home for spring and winter breaks, etc.. $92,500 divided by 48 equals $1,927 per week. You need to have $1,927 per week in sales.

4. How do you want to achieve that? How many clients do you want per week?

If you want 2 clients per week, you will have to have two sales of $963.54  (if you are selling albums/prints, make that $1,163.54).
If you want 4 clients per week, you will have to have four sales of $481.75. (if you are selling albums/prints, make that $681.75)

Umm… okay, why did I add the parentheses?  What are your COGS (cost of goods sold).  If you sell an album, some prints, and a canvas, you are looking at COGS of being around $200 per customer – factor that in.

A little note, how many hours exactly do you work for your client. Hmmm… An hour in transit, 2 hours in session time, 4 hours proofing/editing, an hour uploading and doing office tasks, 3 hours between phone calls and scheduling and emails and questions from client and client sale finalization, packaging, ordering etc.. So you did 10 hours for that client? (we didn’t include other things like marketing and bookkeeping and in person ordering, but I’ll skip that for now – challenge:  log in while you work on a client, EVERYTHING you do related to that client, I bet it will be close to 10 hours or more per client).  Well that’s not bad, that’s about $50/hour toward the business for option one, having two clients per week. That’s half of what plumbers make, though… and guess what, your PICTURES LAST LONGER! :laugh: … but option two puts you at about $25/hour toward the business. Not TOO bad either – but you SHOULD be making at LEAST $50/hour as a BUSINESS OWNER (although myself and others would tell you as a business owner, you should actually be making more like $100/hour because you don’t want to forget having retirement, college funds for your kids, etc. and as a business owner, you should accept nothing less in my personal opinion or you may as well just work a job for someone else that is less stressful than dealing with the public). I challenge you to plug in lower numbers in this equation as well – let’s say you only want to make $20,000 per year – I’ll touch on that at the end.  Although don’t forget, life happens, and you may find yourself in a pinch one day to where you may actually need an income to support your family on your own…. which begs to go back to – what do you value your time away from family at?  One customer takes you away from your family for 10 or more hours.  Is that only worth $250 to you?  Not to me personally…. but to each his own.

5. Back to what do you price?  I personally like to work by worst case scenario  so I figure at the very least, I know I will have 2 clients per week, even during slow time, so that means I would want to guarantee two sales per week at $1,164. So therefore I would price my work so that every client would spend at LEAST $1,164 which means my lowest print package should be $1,164 (or $682 if going to take on 4 clients per week).

Personally, this is just my opinion, but I don’t think a business owner should be making less than $50,000, but that’s just me.  You should network with some other local BUSINESS OWNERS (not photogs, but business owners) and see what they are making.   Want to work with lower figures?  “Oh I just want to do this part time for fun… $20,000 is plenty for me to have part time…”

Okay, let’s work with lower numbers.

Goal: $20,000 Add 35% to that for taxes equals $27,000

Expenses: Add all your expenses up – I’ll be nice and pretend you aren’t spending on all those group buys, trendy items, and you don’t have any SUPER expensive equipment, so let’s say your expenses are $15,000 per year (do you REALLY think that is high? I don’t – not at all – see above list and I challenge you to REALLY evaluate what you are spending every year – most photogs are spending at LEAST $20,000 per year in expenses if not much much more. So $27,000 plus $15,000 equals $42,000

So for you to make $20,000 per year, you need to have sales of at least $42,000

$42,000 divided by 48 weeks per year of steady work equals $875/week in sales without cost of goods sold factored in. You need $1075 (including COGS) per week in sales to have an income of $20,000 per year – so if you are only taking 2 clients per week, you need sales of around $640 for each client. Just keep that in mind…  😉

Also keep in mind, if you are taking on 4 clients per week so that your sales need to be much less HOWEVER when taking on FOUR clients per week – you are working 40 hours per week – that’s FULL TIME for $20,000 per year… umm… That means that you are working a full time job for $10/hour – your time away from your kids is valued at $10/hour? You are missing 40 hours per week of your kids’ lives for $10/hour as a BUSINESS OWNER.   Makes you think, doesn’t it?

I just challenge all new business owners to really look at their figures and use these simple concrete ways to project your income, to define your income, to price yourself out, and actually structure your business as a real business, and operate as a business owner who knows basic business management 101 now.  Work your business proactively with good reasoning behind it.   Remember, IF WE DON’T VALUE THIS INDUSTRY, NO ONE WILL.

Thank you to the incredible portrait photographer Jodie Otte of Black Horse Studio for this thought provoking answer to the question: “How should I price my photography?”

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336 Comments

  1. October 12, 2009 at 1:01 pm —

    …and the word “can’t” should not exist there. Have you spent a good six months (while overlapping a busy time – Christmas or Spring) at higher prices and marketed the entire time? If not, you can’t say that people won’t spend. People spend more than $25 for an 8×10 at Picture People, so how can you say people won’t spend? You need to figure out what makes you valuable. I can’t say I would spend that much for an 8×10 because I am a photog that doesn’t need to. What do YOU do for fun? Do you go on vacation? Do you eat out? Do you buy furniture? Do you have a new car? Whatever is a priority in a person’s life is what they will spend on.

  2. October 12, 2009 at 12:56 pm —

    texxan — a quick note (I’m between shoots). I photograph a lot of NFL players as well as other semi-famous, etc., and others from all walks of life, but I will tell you, the highest spenders are not the wealthiest. The highest spenders are your average middle class to upper middle class who VALUE the work. People are out there that value it.

  3. October 12, 2009 at 12:52 pm —

    I have to agree with “ttexan”. It is a very good article & I completely understand where you are coming from on it. However, I have a very hard time charging clients prices for photos that I myself would not pay. I do action horse-show photos and the occasional portrait session for friends. I charge $25 for an 8×10. Most show photographers I know charge $40 for the same action horse show shot, however I very rarely buy theirs–only at a special show will I pay that much. I know first hand the experience & equipment involved in such photography, but I am much more willing to pay $25 for a show photo than $40. I do a good business at $25/photo and an added bonus is that I get all the photos we want of our own horses in the show. And the reality is that there are many people out there that work for $10/hour or less. In today’s economy, it’s about putting food on the table for many families. My photography is a part-time job for me as my husband and I both have other jobs. And I agree, that as a business owner, it’s nobody’s goal to work for $10/hour but I just can’t charge what I wouldn’t pay myself for photos. If there are photographers out there that can get $1200+ for a photo package, more power to you & good for you!

  4. October 12, 2009 at 12:42 pm —

    This was one of most helpful posts I’ve read in awhile! Thank you for kicking my rear…and getting me to stop feeling bad for everyone having to pay for photos…that THEY LOVE! I know, that’s crazy. But I put so much work into what I do…you’re echoing my husband’s advice.;-)

  5. October 12, 2009 at 12:09 pm —

    Great food for thought…if only we could make this required reading for all photographers.

  6. Melissa C.
    October 12, 2009 at 12:05 pm —

    I really needed to read this post!! I have decided next year to cut back to only 2 sessions per week because my family is missing me and I spend most of my time busy with other peoples stuff. I am definitely going to increase my pricing to at least make up the difference and was wanting to add more into it as well so it would be more beneficial to my and my family at the same time. My question would be, at what time is a good time to raise your pricing and should you give a notice of when it’s going to be in effect and what about people who have already made appts, should they pay the new pricing or be locked into the old pricing? If you are reading thru these and feel like answering some, I would love to hear your thoughts on when is it good to implement new pricing.

    Thanks so much!!

  7. October 12, 2009 at 11:59 am —

    THANK YOU SO MUCH for this post. this is the most comprehensive piece on pricing i’ve come across. i’m in the middle of trying to figure out pricing for my photography services and it’s been nothing short of hair pulling and eating copious amounts of chocolate. thank you again!

  8. ttexxan
    October 12, 2009 at 11:34 am —

    Very nice article and breakdown. I will lump myself in with those who don’t charge nearly enough. We are major major busy, but really trying to get our name out there. Its working and plan on raising prices even more (last price increase month or so ago). Planning first of the year if not sooner : >)….
    It’s no wonder that only 5% are in business because that 5% have a hudge name and clients that must have deep pockets. My wife and I both have regular jobs and make well over multiple 6 figures, but I can tell you we would never spend 800-2000 on a photo package. Its hard for me to charge $95 bucks or $150 for an 8×10 when I wouldn’t even pay that. Most if not all my clients could not even come close to spending $600-1000 on photos so how would anyone get a minimal client order of $1600. Its possible because I know some getting $3200..However her clients are the Dallas Cowboys. Most average photogs are not going to have that luxury. Maybe I need different clients and consider the fact that we really dont need the money since full time job provides. As stated and I know this is horrible, but hard to charge the farm when I know I wouldn’t pay it.

    • Penelope
      June 25, 2015 at 6:11 am —

      I feel the same way as you. The “I want people to still be able to afford me” comment as being an excuse is actually valid. I live in an area that is not cashed up. No matter how amazing, I don’t think I wouldn’t pay $1600 for a photography session and if I did I wouldn’t be able to be a repeat client. It would be a once off treat.
      I am still portfolio building and will increase my prices a little bit and while I understand what the article was saying, I am not going to raise them to be earning >$50/hr once taxes and expenses are removed.

  9. October 12, 2009 at 11:18 am —

    I freaking love this post! I want to send it to everyone in Utah that charges $125 for the session including the CD! We are worth more than that!

  10. October 12, 2009 at 11:08 am —

    wow!!!! This article was a huge reality check and amazing none the less. Thanks for taking the time to break it down for us! now I need an article on how to educate consumers on the importance of quality pictures that last forever and they need to look at quality and not just pricing 😉

  11. October 12, 2009 at 11:04 am —

    right on jodie. however, quality and talent definitely does factor in there too. love this post!! valuing you work. valuing yourself. HUGE!!
    deb

  12. October 12, 2009 at 10:49 am —

    Thank you for sharing this! I’ve been looking into pricing lately, considering long-term impacts of what I do now in that area, etc. and this was very helpful. I don’t want to feel that I’m overcharging my clients, but I need to be reminded not to sell myself short either! Thank you!

  13. October 12, 2009 at 10:41 am —

    Wonderful and honest post. Thanks for putting this out there!

  14. October 12, 2009 at 10:30 am —

    Thank Jodi, for the very timely advice as I am still PB.

  15. October 12, 2009 at 10:20 am —

    Stuff to think about!

  16. October 12, 2009 at 10:19 am —

    Jodie, thanks for your honesty and transparency. I follow your work and whatever you charge – you are worth every penny! 🙂

  17. October 12, 2009 at 10:17 am —

    Oh Jodie (& Jodi)! Thank you! This couldn’t have come at a better time. Just the pep talk I needed to read this Monday morning! 🙂

  18. October 12, 2009 at 10:15 am —

    Great article! Thanks for breaking it down!

  19. October 12, 2009 at 9:53 am —

    Thanks for sharing. This really puts everything into perspective.

  20. October 12, 2009 at 9:18 am —

    Amen Sister!!!

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How To Price Portrait Photography To Make Money