Welcome back to our series on pricing your commercial photography. A few weeks ago we released Part 1 of the series exploring the benefits and pitfalls of working for free. As we delved into the topic, it became clear that free work has its place, but in order to create a sustainable and professional industry, we need to educate our community on the importance of pricing their work appropriately. Therefore, in part 2, we will first show you my personal approach to the layout of a commercial invoice and the thought process behind the layout.
This is a layout I’ve developed over the years that has been well received by customers for being easy to understand and navigate. My personal layout is by no means the ONLY way to do it. I strongly encourage you to create and develop methods for your own pricing strategy and for your own markets. However, the concepts and rationale I present here will remain fairly universal across markets. Regardless of how you choose to present your own bill, the strategies for fair pricing apply.
For our purposes we need a client. So I went to the kitchen to get a coffee and make one. I present to you “High Output Useless Systems Engineers Inc” or “HOUSE Inc.” briefly. As the very descriptive name suggests, HOUSE Inc. consists of a very small but talented team of engineers who have created useless technology that boosts output tremendously. While waiting for my coffee to brew, House Inc. informed me that they are preparing to release their latest and greatest useless product and that they need 2 pictures to showcase their new invention. These 2 images are used on packaging worldwide as well as in print ads appearing in a major technical publication targeting their market. Sounds like a fun project!
First, let’s take a look at what my invoices look like.
There you have it. There is a stripped down basic version of my invoice. You would of course fill it in with the details of your own custom projects. Let’s go ahead and do this with our new client “HOUSE Inc.” All my numbers will be completely arbitrary and won’t tell you much as each market and industry will have its own price point to compete at. We will explore that in a future article. In the meantime, focus on the method.
As you can see, I divided my bill into three categories. This allows us to keep everything organized and provide the client with detailed and visual fees so they can easily see where their money is going and how it is being used.
In order to get your attention and shamelessly build up suspense, we’ll only cover the cost of production in this article. That way I can better explain what exactly that is and how we intend to deal with it, and you, dear audience, have something to look forward to in the coming weeks.
What are production costs?
Production costs are simply the costs incurred by you, the photographer, in carrying out the production of the images you have been commissioned to create. This section does NOT include your own fee for creating the images. We’ll save that for another section and a future article.
Every photo shoot and project comes with some costs. In a recent article by our own Gary Martin, he examined the anatomy of a $100,000 commercial estimate. If you look at the bill presented in his article you will see that there is a lot of production cost which is the main factor behind the higher price. Productions come in all sizes and price ranges. For some projects, you may need to hire a set designer and some craftsmen to put together an intricate backdrop. Some projects take place in a foreign country and you need to hire a translator and a location scout. Some projects might have a team of 20 people who all need to be taken care of for the next 3 days. These costs have in common that they are absolutely crucial to the smooth and timely production of your images and are therefore passed on to the customer via the “production costs” section of your invoice.
In the Production Costs section, you should add up all of these expenses incurred during your production. Of course, when you’re making an estimate, you’re “estimating” things to the best of your ability, so you’ll need to use standard amounts from your experience or from the market research you use to determine those expenses. For example, you might estimate that you need $50 a day in food for each person on set. If you have 10 people on set, your catering budget is $500. It’s also not uncommon for a photographer to add a mark-up to expenses to cover the cost of their own time and effort. For example, if you rent gear for $1000, you can add a 20% mark-up to cover the time and gas it takes to pick it all up.
This is how we could build up the production costs for our customer HOUSE Inc.
The images required are not overly complex, so our production costs are quite simple. I’m going to pretend their new product is quite a big device, so some special equipment needs to be rented. In our example, we applied a $1000 fee for this, which includes a surcharge for transportation and time. Because the product is big, I need 2 assistants to help me move and position the product. Your extra hands will also come in handy, no pun intended, for positioning all the special gear and lighting we hired. I will also be hiring a product stylist for the day to help create a flawless image.
To keep things simple I will be taking these images in my own studio on a piece of seamless white paper. As we need 2 pictures it only takes me 1 day to create this so all our rentals and rentals are for a single day. I also include a prop rental. I’m pretending that the client might want to put some props in these images, and of course that’s a production cost, so we’re going to add them here.
Point by point, add up all your expenses like a receipt. That’s it! There is not much more in our “Production costs” section. The bottom line here is to figure out what it’s going to cost you to create the images, and then charge the client for it.
Transparency & Breakdown
Don’t be afraid to show the customer all your expenses. In my experience, a customer will appreciate how you intend to spend their money, and being open about everything actually makes you appear more responsible. Instead of trying to summarize your expenses under general blanket statements, take the time to be a little more descriptive about your expenses. Some people might be inclined to feel guilty about all of these accusations, but you shouldn’t. The customer knows and expects that there are costs associated with production. You will understand that this will not be a project funded by you. Clients will appreciate a detailed list of all of your expenses and will actually develop a greater sense of respect for the sheer amount of work and thought you put into their project.
That concludes this issue of The Guide To Pricing Commercial Photography. As usual, I hope you found this an interesting and imaginative read. Stay tuned for future releases that will cover the creative fee and royalty portions of our bill. Until next time! Visit me anytime at Peter House – Commercial Photographer to follow our work.