How to Use Markup Factors
Lesson 16 from: Building Your Photography Business for under $3,000Kathy Holcombe
How to Use Markup Factors
Lesson 16 from: Building Your Photography Business for under $3,000Kathy Holcombe
Lessons
Class Introduction
06:45 2Create Your Business Plan
04:53 3Where to Invest Your Money?
27:44 4Where to Spend Your Time?
05:44 5How to be Profitable
08:58 6Write Your Personal Business Plan
16:16 7Business Plan Q & A
12:52 8Products: Overview
02:33What is Your Photography Style?
08:33 10What Products do You Want to Offer?
26:19 11Rules for Products
06:34 12Whats Involved in the Shoots for Your Products?
12:04 13How Will You Produce Your Products?
08:47 14Determine Your Pricing Strategy
06:05 15What to Charge for Your Products
18:19 16How to Use Markup Factors
07:37 17The Per Hour Sale
06:14 18Find Your Target Sale
08:25 19Pricing Strategy Q & A
22:24 20Develop a Sales Strategy
12:57 21In-person Sales Strategy
20:25 22Online Sales Strategy
23:11 23Mobile Sales Kits
18:09 24Identify Your Target Client
33:39 25Define Your Niche Market
16:10 26Develop Your Marketing Plan
14:27 27How to Increase Your Following
06:45 28Develop a Marketing Strategy
11:48 29Maximize Your Website
05:17 30What is The Purpose of Your Website?
09:33 31Website Essentials
14:13 32Website Tools to Create a Great Sale
11:58 33Online Selling Tools
11:30 34Online Shopping Cart
04:59 35Facebook Marketing Strategies & Materials
15:28 36Using Ads on Facebook
11:21 37Engagement on Facebook
08:22 38Instagram Marketing Strategies
15:27 39Define Your Brand
14:53 40Build a Solid Brand
14:46 41Maintain Your Brand through Publicity
10:39Lesson Info
How to Use Markup Factors
Here's what your bonus material looks like. It has all the things that you need to keep in mind for calculating your prices. So it starts out with a description of the product and then it has how much time does it take you to make that product. Now, when you look at that and you think 8x for eight hours, what, that's crazy, except that whether I make an 8x or 10 prints from a session, I have about eight hours of time invested in that product, by the time I'm done with phone calls, the session itself, editing, selling, re-touching, placing the order. The average portrait session for an efficient photographer takes at least eight hours. So, I put eight hours as my time cost for that 8x10 there. Then, we all agreed that they cost $ and (laughs) I'm gonna use a markup factor of five because I started my business with a markup factor of five and I've maintained that or higher. You can do it if you have confidence in your sales, I promise, nobody's even gonna question it if you have everythi...
ng else in place. So, I put a markup factor of five in there, so 10 times 5 equals $50. This is the minimum of what I have to charge. This is if we're going for cost based pricing. There's two other categories here that I added to your price calculator because what you actually choose to charge, you need to be aware of this, but you can finagle it however you need to do that, okay? Numbers, math always works the same way, but pricing has bendable numbers. So, I tried it out with my clients. I started with $50. The next client that called, oh, our 8x10's start at $65. No question. Oh, our 8x10's start at $85. Our 8x10's are 90. Our 8x10's are 100. Our 8x10's are 120. Whoa, back it back down. Okay? This was my sweet spot. If someone could call my business and I could say our portraits start at $99, I could get them to book a session. So, this is demand based pricing. This is cost based pricing. And you can shift things as you need to. So, and then of course, you need to know how much profit you have for every single product. So, here's the next thing you have to do in your business. We did a business plan. We decided what our products were and created the product guide. Now, you're going to create the pricing calculator, so every single size of every single product that you're going to offer needs to go in this chart, so that you can look at it at any given moment and say, oh, when I sell an 8x10, I make $90. As a business owner, it's your responsibility to know that. Imagine if you had to show up at a board of directors meeting and give them the, just the status of your business, something like that would be pretty important to know, right? (laughs) You are the board of directors, you need to see what that is like. So, here's what it looks like. So, if I'm talking about a 20x20 acrylic with hardware, this is how much time is invested in that. This is how much it cost me. I used a markup factor. I have to charge at least 595, but then I'm gonna bump it up as much as I can until my client say no more. So, I think I can actually charge $900 for that product, a 20x20 unique work of art. Go to a gallery, is that comparable to what's selling in your area for fine art? Of course it is. Alright, so if you look at this, though, here's something interesting. These are my actual numbers. This is based on Simply Color Labs' pricing structure, that's our lab. And so, I added it all up, now I want you to look, I have 720 here, 999, 1170, 1099. I lowered my price here, I raised it here, I raised it here, I lowered it here, and I lowered it here even more. What do you think I'm doing? Why would I do that? Does that make any sense at all? Think about it for a second. So, the reason that I did this is because I want to have round, consistent numbers here. I want my client to be able to look at my price list and have it immediately make sense to them, okay? So, I have regular round increments, going up in size, mmkay? As a business owner, I know which size my client is going to opt to purchase more often than not. So, if I have four sizes, I know that I am going to fall somewhere in here in my sales because people almost always buy in the middle, mmkay? The other thing that I know about my personal business is sometimes my clients really stretch to be able to afford some of this, I don't, not all my clients are wealthy. So, if they are stretching, they are gonna get the smallest size, and that I have my most percentage of profit, okay? So, all of these I have a pretty good range of profit, and in all honesty, the only difference in creating any of these products is which size I click on the order form, right? Doesn't take me any more time to create a 30x than it does a 20 inch portrait, right? So as long as I'm making these profits over here, it's okay with me for my business and it's compromise that I'm willing to make to have a nice, round, easy to understand numbers for my clients, mmkay? The other thing that I know about my lab is that they run sales pretty regularly, they often have 20, 30, 40% off of a product, so I think I told you earlier that I have a turnaround time of 4-6 weeks, right, for my products. I can wait, in that time, my lab will run a sale on my products and I can order the bigger guys at a discounted rate. Cuz I've built that into the process of my business. Okay? So, do you not associate a cost with your time, to creative value with that, I see that it was in your calculation, but it wasn't in your end number? Absolutely, and in fact, target sale is how I compensate for that time, so that's what I'm getting ready to talk about next. Wonderful segue. But I think there was one more question that I'll answer before that. Do you give information to your client about what companies you use to-- Never. Okay. Never, that's my job as a professional, it's nothing they need to worry about. Do they ever ask you? Never. Okay. Good to know. Not one time.
Class Materials
Bonus Materials with Purchase
Bonus Materials
Ratings and Reviews
Amanda Beck
Kathy was a wonderful instructor. She was engaging and someone who was precise and incredibly helpful. We have a full time photography business and are always looking for new ways of running our business. Her information was insightful and forced us to have conversations about our business that we have haven't had in several years. She is fantastic and someone who has the information needed to help you start or expand your business. Thank you for a wonderful class!!
Chrissie
Thank you Kathy for yet again another very thought provoking class. You are such an inspiration, teaching us the right questions to ask ourselves so we too can be brilliant photographers / entrepreneurs. I was a fulltime RVer for seven years, traversing 44 states and seeing some of the most beautiful places on our planet. It gave me a great opportunity to meet some extraordinary people and to hone my photography skills. Now I have put down roots in Stapleton - Denver, CO and am soon to launch my own Family Lifestyle Photography business. Your course has definitely given me the courage to just charge ahead and go for it!
Jeph DeLorme
Another top notch production from the amazing team at Creative Live! Kathy Holcombe, aka FAMAGOGO did a great job of covering all the basics along with the associated costs involved in starting up a photography business. However, you don't need to be a beginner to get great info from this class, it's packed with ideas and tips that even an experienced pro can put to work and take to the bank literally the next day. I highly recommend this class.