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Pitfalls of Pricing

We spoke about the two experiences that we're going to get into today, and the first one was your online, which is we caught your online experience, which we call the online store front, and the second we get into is your pricing experience. I've alternately labelled this the pitfalls of pricing, and like I mentioned before, that when photographers are shooting more often, they are building their portfolio and they're getting better, and then they want to raise their prices. Naturally, you want to move into a new market naturally, but this is where things get tricky, and they believe that they get tricky in three specific situations, and if you see it differently, we can have a conversation about that later on to the way I kind of see it isn't three sections changing your pricing model too often. Secondly, pricing yourself out of demand and thirdly, underpricing not covering your costs, and we see a lot of this happening in the industry. A lot of people informs five hundred dollars, fo...

r a wedding and an album. How can? How can they survive? But we know it's happening, and that is what I call underpricing you're not covering your costs, so we're going to break the pitfalls into pricing into three main sections I ask people before the break in to get caffeinated, this is probably what I'm most nervous about today, I'm not a numbers girl. I don't profess to be a numbers guru, but I think it's important for us to get into this because this is part of the brain ing experience, so please know that I don't come in thinking that I have all the answers that I do it the right way. I just want you to understand the way that I do it so that you can hone in the way that you want to do it, that is all. So this first section, the first pitfall is pricing. We're going to get into changing your pricing model too often now as a clarification and a caveat, changing your prices within your pricing model not a bad thing. Changing your pricing model is where things are going to get complicated. This is going to get into a little bit more. For example, I'm a service based photographer, which means that I'm charging for my services, I'm not charging necessarily, and I'm not relying on product sales to drive my profitability because I have that in the back of my mind, I know I'm charging for my services, I'm going to get paid fairly and quite frankly, heavily for that product, for me is not a big thing in my business. Said that the reason why I think having when you change your pricing model not your price is when you change your pricing model it can get really confusing for instance, if you start your business with one pricing model and then you build referrals and then the referrals come in and you're using a different pricing model there like wait a minute but my friends got you know, four eight by tens and two five by sevens that's complicated if your reporter photographer and then you have the same family that you shot for three years and every three years you've changed your pricing model they don't know what to expect of you and they don't necessarily think it's a good reflection of your brand what we're never going to move into is I think it's easy tio get inspired you listen to other photographers talk about their pricing model and then all of a sudden you're like I want to do that I totally get fall into the same thing I see what someone else is doing anything that's really smart thing is really brilliant I'm like I'm gonna do I'm gonna do that but then I realized that different pricing models although they are hey could really work for somebody else they might not play to my strength I want you to choose a pricing model in own on pricing model that plays to your strengths my strength is not sales so there are some photographers who can do a post consultation where they set their studio they have a glass of champagne and they have chocolates they set up the viewing party and then they do album add ons and they do pages and they do extra canvases and I'm just like I'm not good at that nor do I have a schedule that accommodates my busy client contacts and I do love destination weddings I'm not gonna have them come from new york to orange county for a viewing party so because I know this that is not to say that the product driven model is bad it's just not my strength I need you to figure out what your strengths are in terms of pricing so that you could go full ahead with what you want to do and then if you decide to do a product driven model know what your prices are and then charge heavily for the time that it takes for you to produce the products for you to package the products for you to present the products just saying that now I want people online to walk through their packages with us so of course I'm going to use nikki right and melissa as examples, but if you're a home we're going to be walking through this process step by step and I want people at home to understand what they're doing in a step by step component again I'm not getting into pricing to tear apart pricing. I'm getting into prison to change your perspective for me, I was telling nikki off camera it's important for me to have you run a profitable business? Remember that these are the terms that I'm going to be using again and again, profitability at the end, we're going to revisit this issue, this notion not issue so there's, if you're walking on line, walking along with us online, bring out a calculator, bring out a pen and bring out your collections were going to go through, we're going to start with melissa's, and we're gonna go through slowly through them. Don't be scared, don't be scared, don't be scared, okay? Don't be scared, okay? So we're going to start with melissa's collection melissa's so graciously gave us her wedding investments, and she's listed out her wedding investments. I'm going to start with package, too, and I'm gonna get to why I'm staying with package too, because we're going to go through this process in the more that I did this process, it became a little unnecessary to repeat it, repeated repeated what I'm going to start with, we start with package b in the middle of the screen they were first going to do, is we're going to figure out melissa's working hours, this is the time that melissa is spending every time she books package b how many hours should melissa expect toe work? Is this a hard and fast rule? No, but it's a really good estimate as to how many hours she's goingto work working this wedding so package b I'm going to estimate that melissa spends one hour driving to the engagement session thirty minutes there, thirty minutes back it could on occasion be twenty minutes for forty minutes a nice average thirty thirty minutes there in thirty minutes, he spends two hours shooting the engagement session. She spends one hour cooling the engagement session, which means she's picking her favorites from all of the photos that she shot. She spends three hours editing the engagement session for those who watching online, I'm using their actual numbers, so if you're at a point in your business where you don't know how long it's taking you to commute to your engagement sessions new homework assignment if you don't know how long it's taking you too cole, your images figure that out if you don't know how long it's taking you to edit your engagement sessions, I need you to start keeping track because this is how you become more profitable the less time you work spending working one wedding, the more profitable you are, we're going to get into that in a second, so start keeping track of your hours we are now three hours editing engagement session one hour driving to the wedding thirty minutes there thirty minutes back twelve hours shooting the wedding now what melissa has outlined in her package she has full day wedding coverage including getting ready pictures I had to ask melissa how many hours does a full wedding day average cost me turned out to be and she responded ah full wedding coverage for me usually is twelve hours as a side note I said it wasn't gonna do this as a side note I want you to start putting ours in your collections because it could mean twelve hours but you can have a bride who expects fourteen then you become less profitable so if you spend twelve hours say twelve hours or if I were you depending on how it works out for you say ten hours and if they would like to add on ours ala carte you're making sure that you're covering your raising that margin ability of profitability we're going to get into that in a second but I think it's going to be important for you instead of saying full day because you can't control that what if somebody wanted fifteen hours well you said it that's a lot of work it is a lot it's a lot of time with her family a lot on your feet you pick your number then you just these hours accordingly but right now melissa's estimate is twelve hours melissa spends five hours culling the wedding, going through all the images and choosing her favorites. I ask melissa how long it takes for her to edit the wedding, and it takes melissa twenty four hours to edit her wedding. Now, this is not obviously twenty four hours consecutively that's going to twenty four hours broken in when melissa can fit it into her work schedule. What I'm doing is adding all of these hours and getting her total working hours to forty nine hours. So every time, melissa books package b she's working forty nine hours, that's forty nine hours dedicate your business also away from your family. We'll get into that in a second. Now there are certain things called fixed costs, so every time that you book package be, you're gonna have to pay something. And in this particular situation we are having you pay three hundred dollars to your second shooter. Melissa pays twenty five dollars per hour. Melissa works twelve hours. She pays her second shooter more if you book this wedding and you had full coverage and they wanted to book you for fifteen hours, you're paying your second shooter more and you're not covering those costs think about that carefully, you want to control your fixed costs. So you can control it by saying twelve hours, then you know for sure you're fixed costs will only be three hundred dollars for your second photographer. You're also paying thirty dollars for an online gallery every time you book a wedding that's the cost that's associated with package b this brings your total fixed cost to three hundred and thirty dollars, three hundred dollars here, a second shooter, plus thirty dollars for the online gallery. Now, in order to figure out your profitability, we're going to take your total package number twenty three hundred dollars and subtract three hundred and thirty dollars, total profitability for melissa is one thousand nine hundred and seventy dollars. Okay, now what I want to do is I want to find out how profitable ur per hour remember, I'm not going to get into the specifics. There are other photographers and other entrepreneurs who are doing it better. I want to bring this simple as basic as possible. I want you running a profitable business, you get forty dollars per hour to shoot that wedding. Okay, now what I want to do is we're going to take it, we're going to take this and we're going to analyze it again, package c so make a note, forty dollars an hour for package now what we're going to do is melissa melissa is only adding elements on to package c so I don't need to go through one hour for shooting one hour okay so we have all of those hours which is forty nine hours but in this collection she includes a couple things she includes an album for one for one thing so I asked melissa if you include an album how many hours does it take for you to design the album and melissa and give me an estimate of ten hours that's just designed not to deal with going back and forth to the client but let's just play with ten hours so plus ten hours for album design what that brings your total working hours too fifty nine hours remember ten hours plus the forty nine hours for package are we all on the same page if I'm not just let me know we have two hundred dollars as a fixed costs for your makeup artists because melissa is including now with package she she includes a makeup artist with her engagement session so I'm estimating that cost to be two hundred dollars for makeup in here fixed cost second shooter three hundred dollars for twelve our wedding and thirty dollars for your online gallery now I also need to put into your fixed costs or your album costs in here you I have a twenty five page wedding album and in your and I had the luxury of looking at last year's packages and you said it was a ten by ten so I'm assuming that it's going to be a ten by ten twenty five page album leather bound these are all guesses, but I'm going to make a safe assumption that that's it and if that is the case, we're going going to roughly cost you four hundred twenty five dollars at cost for that album those your fixed costs in this collection, your total fixed costs then becomes we're adding all of those things together nine hundred and twenty five dollars okay, what we're going to do to see your profit is get your fixed costs and subtracted from the total package cost that brings your total to two thousand two hundred and seventy five dollars now let's see how much you make per hour, thirty nine dollars if we moved to all of these collections, melissa makes the least for our in your largest package because you're fixed costs are so high and you're spending so long designing that album your package, eh? You book you are getting paid thirty nine dollars an hour based on the same numbers that we ran forty dollars an hour for package b and thirty eight dollars for a package c now one thing I want to ask real quick so taking that all out now you know your numbers now you see that you're getting paid forty dollars an hour to be away from you and these air new collections have you booked any weddings with this new collection just one just one so your past weddings you were probably I did your numbers for your past weddings too and you were in for package b which you haven't booked to packing to see yet right? So I functioned on the assumption that you had consistently book package b in your past collection in your past collection to your work making thirty one dollars an hour so there's no reason there's there's no judgment that's thirty one dollars an hour to do something you're passionate about good for you I want to make you more profitable but the issue that I see is how many weddings did you book at your last package in your last packages? How many weddings last time? Nine nine with your last package we've booked one with this package the difference between both of melissa's packages was a six hundred dollar difference melissa went across the board from two thousand twelve to two thousand thirteen and you raise your packages six hundred dollars it made you more profitable it made your hourly rate go up but you're booking less okay in light of that I'm not going to tell you what to do, but I might suggest I might suggest that six hundred dollars might have been too much of a jump not because you're not worth it's not because I don't think you deserve it not because I don't think that your children deserve if you're going away for them for you to get paid more but simply because you're slashing your referral circle and you made a big job considering where you are if you're if you're starting collection for package a was twelve hundred dollars last year going up tio eighteen hundred dollars is quite a big it's a significant difference so bear that in mind if I were you I would have raised the price is three hundred dollars my model when I first started with every time I booked three weddings I raised the price is three hundred dollars so instead of you waiting an entire year and then raising our prices six hundred dollars why don't you raise your prices at slower increments but more frequently because then you could throttle supply and demand were going to get to that in a second are we okay so far yeah okay gimme questions yeah no so from here on out I mean what would you suggest that I do? Would you just suggest that I stick it out and I'm not booking very much at this pricing ok? The next section is pricing yourself out of demand but I'm going to be real with you because I think is it more important for you to book weddings at this price or more important for you to get busy it's hard because I don't really want to be I don't feel the need to be busy busy but I do want to be working so I'm afraid that I'm going to challenge you on that because last episode how many weddings do you want a book for this year fifteen to eighteen that's a lot that's busy okay, so I'm guessing so right when I hear it in your mouth I guess no, no and I'm still thinking that and I guess in my head that doesn't seem like busy busy to me. Eighteen weddings is busy right now. Would you agree? Do you think eighteen winnings is busy? Nikki dating getting when this is busy? Fifteen. So so is it more important for you to book at these collections or is it more important for you to get busy my husband's watching and he's like looking at these collections that's a tough question, okay, you don't need the internet, but if you're not looking at this and you end up booking one for the year yeah that's not what I want. Yeah, so what you have to do is you have to throttle your prices in order for you to find that sweet spot just to grow your base because you really only have eight weddings under about nine nine winnings in your belt that's still new I mean a lot you've changed so much as a photographer, I think you really need to to still build your portfolio, so I think you should be charging last year's prices. No, but do I think you should be charging this prices if you're not looking okay, now that we're going to move into this but I want to dig deeper if you guys want to the later part time we're gonna get into nikki's collections so nicky, we start off with collection three this is what comes in on collection three is nikki's least expensive collection it's her starting collection so we're gonna get into the same numbers with the same number breakdown that we did, melissa, but they're slightly different for nikki because they take different times. I estimated one hour driving to the engagement session thirty minutes one way, thirty minutes back two hours shooting the engagement session, which is what's listed in her collection one hour culling the engagement session five hours editing the engagement session one hour driving to the wedding six hours shooting the wedding as denoted in here one hour culling the wedding in twenty hours editing the wedding, which brings nikki's total working hours to thirty seven I've estimated an online gallery now you could swap out your numbers if you're sending a disc or if you're sending a usb what you need your fix class then become the cost of the disc, the cost of getting it printed. If you have a custom package, white house does custom packages, that's it then becomes a fixed costs for you descended, then you need to fix it, fixing your postage to those air fixed costs. So all of these things you need to start adding into your collections. Nicky also pays a second shooter, which she has an in to the er back online gallery for thirty dollars you have you pay? I don't want to use any terms, but you are a total amount to accompany to host your images. So what I did was if I got all of your weddings and they divided it out by the total amount you pay per year, correct, you pay a flat fee per year for my online viewing gallery ideo perfect. So I got that number and divide it out by the numbers of weddings, and last year you shot fifteen, so we might be a few dollars off a little bit rough estimate you can fix these when you get what you've been thinking that I was because the company that I do use for my online gallery, I wasn't even thinking that into my fixed cross, okay, so this is good. Good, good, good. And I'm going to go into when I first started. What might fix class were too. So it's important for you to think about the things that you just sometimes, nikki, but of a good point. You pay a yearly feed to a company, right? They provide a service. But the way for you to fix up to figure out your fixed cost per wedding is whatever you pay to them for that year divided out between how many weddings you book that year to get your per wedding cost. Thank you for bringing that up. Brilliant. Nicky pays two hundred dollars for a second shooter. That's included in this collection, this spring's nikki's total fixed costs two, two hundred and thirty dollars, nikki's total profitability. What we get is her fixed costs and subtracted from from twenty hundred dollars comes out to be total profit. Two thousand five hundred and seventy dollars. This means that nicky, when she books this wedding, is making sixty nine dollars an hour. Okay, now I wanted to move into nikki's collection, teo, to see how we can juxtapose and see what's going on. But what I discovered wass there was no price listed for collection, so and that's okay, small little things, but guess what next month? We have your website up we're going to have all that stuff just we're going to get a medium if you're comfortable and if you're comfortable we'll have a ball park figure if you're not comfortable that we don't have to do that but with this down there ok so I scrolled you know I know it's my ok ok but that's ok but I want you to do before we go before we come back I want you to know your numbers yeah that's gonna be really important but so far do I see any blaring you know anything no. How many weddings did you book it this current price rate because I know that you recently changed prices right two perfect good okay, we can't I think it's too premature how long have you had these new prices? Um since just before probably end of november. Okay, two weddings in about two months I think it's still too early to tell how people are responding to demand but remember I'm going to ask you the same question I asked melissa do you want to but packages I mean you want to book weddings at this rate or do you want to get busy it's this hard balance? I feel you yeah, but we're gonna get into pricing yourself out of demand in a second, okay, right no I am not going to get into ryan has a slightly product base collection menu I'm not going to get into all of ryan's pricing models because I just want to highlight one difference. I think ryan and I would probably have to have a one on one when it comes to pricing because it's super, super, super complicated he's eating he's offering a lot in in his black label collection that I don't think that we have the time for to do right now, but I'm going to get into and show base of what I would do to get your bottom dollar for your gold collection, which is your starting collection. We're going to your numbers, which are specific to you one hour driving to the engagement session two hours shooting the engagement session one hour, calling the engagement session three hours, editing the engagement session one hour driving to the wedding, ryan in this color in this collection, chutes waiting for eight hours. He spends five hours calling, he spends eighteen hours editing, and then he also includes an album in his opening collection. And that album design process takes him five hours. His total working hours come out to be forty four hours as he works the sweating. Now what are ryan's fixed costs? Ryan's fixed costs for his online gallery would be thirty dollars. His fixed costs I asked him how much does it cost him at cost to get the twelve by twelve forty page linen album because that's what's included two four by four smaller albums and he said that that costed him three hundred and ninety five dollars ryan's total fixed costs our four hundred and ninety, four hundred and twenty five dollars I'm going to find out his total profit by subtracting his fixed cost from that collection and that gives me two thousand seventy four dollars that's what you're profiting what now? This means that ryan is making forty seven dollars an hour for this, but recently ryan told me that he started outsourcing his images so what this does for him is that it's saving him time because he's not spending the time editing those images himself an average I would an estimate average for outsourcing for an eight hour wedding I'm guessing in the ballpark of eight hundred images to nine hundred images is going to cost three hundred and twenty five dollars for outsourcing. This is going to become a fixed cost for ryan because he's paying somebody else to do work for him but he's paying somebody else to do work for him but he's getting hours back because he's no longer editing that wedding so his total fixed costs if I get for twenty five and I add the three twenty five for outsourcing his total excuse me, did it backwards. His total working hours now he's not working eighteen hours to edit the wedding because he's outsourcing that are we on the same page? That means that his total fixed costs become seven hundred and fifty dollars, which are for twenty five plus the three, twenty five. And in order to get your hourly rate, that brings your new hourly rate toe one thousand the tone thank you brings your total profit. Okay, let me welcome visitors again he's making forty seven dollars per hour if he doesn't outsource athe outsources, he must pay three hundred and twenty five dollars, but because he outsourcing he's not working those eighteen hours to edit the wedding, which means his total working hours become twenty six hours instead of forty four cool, but that means his total costs his told fixed cost raise seven hundred and fifty dollars, and because it's fixed cost raise, we must subtract it from his collection, which brings his new prophet toe one thousand seven hundred and forty nine dollars. But how much is he making per hour? Sixty seven dollars per hour by him paying somebody teo edit his wedding he's using those eighteen hours and he becomes more profitable now I have to I'm going to challenge ryan to use those eighteen hours too you use them carefully I want him to work in his marketing I want you to work on block post I want you to work on defining your your brand I want you networking I want u submitting your work for publication I want you having dinner with your mom I want you celebrating life you know I'm saying that you just okay good that your mom's watching so what I want you to do with the time that you get back you're more profitable per hour but you're less probable overall but you need to use that time to drum up more business to book more and I well I january was the first wedding that I did that and the outsourcing yes I just recently started okay and I saw her wedding on saturday and she got her wedding images on friday not even a week after her wedding and she was like oh my gosh do you have a time machine or something and so it was like it was what do you think your bride thinks about your brand? We were talking about experiences what do you think you're bright felt her wedding's on saturday she sees her entire gallery of images on the following friday what do you think she's feeling I would be happy right now so my team at least right that's putting it mildly yes happy is a good word for me she probably thinks the world of q because in her mind she's thinking that your service above everybody else's you know was it your mom texting you better have dinner mom I'm right and I both use photographers edit for me I wanted a life as well as a business and if it hears what we're saying twenty hours to edit a wedding twenty four hours to edit a wedding eighteen hours to edit a wedding I want to live my life I didn't become a photographer to become an editor now there are varying opinions of this and that's totally fine if this is not working you're business model that's okay but all I'm saying is if it becomes a fixed cost to put it into your profitability and then use those extra hours to go out and get more business and this is going to apply to somebody who probably is a little bit busier you have one wedding every four months you probably can handle the editing process but during the summer when you have like four five weddings in a row maybe outsourcing one or a few or working into your workflow is going to be the solution for you to offer a good brain experience that was the big chunk that was a big chunk now this second pitiful I see with pricing is going to be pricing yourself out of demand now I see a lot of I get a lot of emails from photographers who are just like I don't know why I'm not booking weddings I tend to me I can't answer because I don't know where they live I don't know who they are I don't know how they interact I don't know the quality that portfolio, but I'm gonna use this following example to express something that I recently he recently reached out to me and I'm going to read his e mail and they were gonna walk through that process together as this is my perception as to why he might not be looking. So this is an e mail from a photographer hello jasmine, after having what I thought was a good meeting with the wedding planner, I know well and her client and then hearing nothing but the sound of crickets afterward, I have started questioning my pricing. I've heard you and other wedding pros talk how they started at a thousand dollars and worked from there I live in a pretty affluent area. I've seen other photographers charge quite a bit in the area for work that is less than par. So given the fact that it came out of the gate charging two thousand nine hundred and fifty for a basic package including two photographers, eight hours of coverage, I throw an engagement session for free, etcetera I shot my first wedding on my own this past summer and have since booked a couple more so under his belt, he has one wedding from start to finish, that's it and then he's booked a couple more first wedding on his own. Yes, I shot my first winning on my own this past summer and have since booked a couple more. I feel like I deliver great service and have a happy clients I go above and beyond to make sure my client's experience is awesome from start to finish, but he can really only say that for one client right now just so that we're on the same page, given that in the work I put out, I felt like what I charge is a good deal in the area. A thousand dollars just seems too little for me to start at. I don't want to throw away weddings either by starting to hi, I'm wondering if I need to I may need to bite the bullet and drop my prices to get more action rolling out of the gate and also the fact that you should charge what you feel you are worth sincerely shooting for the moon, so I'm seeing a lot here. I'm seeing a person who thinks he should charge what he's worth and there are other people who are charging more than he then he's able tio and the worst, and their work is worse than hiss. So I want to get into what I think could possibly situation if you are in the situation and you're not booking weddings and he feels somewhat like how can that person be charging what they are? And I'm charging less and why am I hearing crickets let's get into a little bit? I want to focus on the perspective of pricing I don't know if shooting for the moon has to change his prices. I don't, but I want I want to do is to change how you how you view it. I talk to may first creative life course is how we started charging weddings a thousand dollars that's what I got paid a thousand bucks and if you wanted to buy the disk of digital negatives, it was five hundred bucks. So that's when he talks about when pros talk about a thousand dollars that's what he's referring teo, every three weddings I booked after I booked my first few weddings I raised the price is three hundred dollars I got into that melissa so now that we're on the same page, I want to let everybody know out in the open I started a thousand bucks that's what I did and I worked my way up, he quotes I've seen other photographers in the area charge quite a bit in my affluent area for work that is less than par I'm going to challenge anybody to not look to it other photographers are charging and then try to base yours on that because I think it's our artists, we like to say, well, I'm better than her, but so I should charge more for her for that her and then I'm not as good as him, so I should charge lesson him. We're going to be misled by gauging our work. On the worth of what other people are saying, the only people who should matter are the bride's that you're booking let them dictate supply in demand keeper blinders on and find your sweet spot first. Now secondly, given these factors and the work I put out, I feel like what I charge is a good deal in this area. This is where I'm gonna take another issue if it was really a good deal, a lot of people would be booking because that's, how good deals work when you go to wal mart and you see the ninety nine cent barrel that's a good deal so people bite people get a lot of it. If not a lot of people are booking you, you're probably not as good of a deal as you think you are, so we just need to change our perspective we need to understand that I believe photographers are worth their weight in gold, I believe that but it doesn't matter what I think, and it doesn't matter what you think the bride must be willing to pay you for your work, and this is what I'm talking about throttling you want to find a spot that will help you book a lot of clients and increase your demand the only way you could be raising your prices if you get more demand that's how supply and demand works, I think you're worth more, but quite clients need to feel the same way. That's, what should be guiding how we're raising our prices my opinion now you may or may not have to change the prices on lee. You can decide what he's going to be best for your business. All I want to do is re calibrate your perspective on pricing. I can tell you people kind of have a beef with the fact that he started off so low I was perceived as a bargain barrel photographer, right? A thousand bucks I'm the person that really pissed off a lot of photographers and area fifteen hundred dollars, they were getting ten hours of coverage, a second photographer and the disk and people like, how are you making a profit? I'm going to get into my profitability model in a second, but what was happening during those weddings? I was meeting coordinator. I was meeting florists I was meeting djs, I was out there getting busy I was building my portfolio that does not come with a price necessarily I am not saying that you should be a good deal I'm not saying that you should be the bargain barrel photographer, but if you're sitting at home and you're saying I'm worth three thousand dollars and I can't get a wedding to be booked well, is it more important for you to book the three thousand dollar wedding or is it more important for you to shoot the wedding, find out what your spot is? But you must first understand whatyou're fixed costs are then you must understand your profitability model and then you could say, you know what? I'm okay making twenty five dollars an hour because right now I'm working in a cubicle and h r and I'm making eighteen dollars an hour and I hate it at least you know what you're making at least you could defend it and own and I'm going to raise my prices in three more weddings. This is a perspective that I'm challenge a lot of photographers to be not the bargain barrel but knowing your prices and moving forward from there moving on, we talked about fixed costs now this is the third kind of pitiful that I see people coming into and this is what we were just talking about underpricing I want you to understand covering your fixed costing your profitability models during my first year I talked about your freaks cost, so I want to get into my fixed costs you understand? My fixed costs are going to be a little bit more detailed than yours where because I don't know what you pay like nikki had said, oh, I didn't know that that's what I was charging, but you're right so here's a few more things that you could think about in terms of your fixed costs, so I talked about how in the beginning it was a thousand dollars for a shoot on lee, but I never booked that collection people always wanted the diskette digital negatives, so fifteen hundred dollars was what I was kind of cruising and I booked my first five weddings at fifteen hundred dollars, and then I raise my price of three hundred dollars and they've booked another three weddings we're gonna get into that. So roughly an online gallery to showcase the images after a wedding engagement session was going to be thirty dollars outsource my post production and post production from the beginning, I didn't want to get into light room I didn't want I wanted to get busy I wanted to shoot so my post production earlier was less than it is now because I actually paid another photographer she'd reach out to me and said I need to make some cash on the side pay if you pay me twenty five cents an image so I would send her eight hundred images after every wedding and she would charge me two hundred bucks so that was a fixed costs for me I would pay thirty two dollars to ship the hard drive there and back to my outsource or to me outsourced production assistant now I paid a bookkeeper now I paid the bookkeeper on a monthly basis I got my total amount that I paid him for the year and I divided it out for each wedding that I booked and that turned out to be roughly forty five dollars per wedding so I put that in is a fixed costs I a time back in two thousand seven I was spending about forty dollars on gas. Now that number is going to be higher but these were my fixed cost at the time I think you should putting in gas and you're fixed costs too so you know that plays into it twenty dollars I was sending it at the time was dating a disc and for the images so the disc the stationery and the postage was roughly twenty dollars per per wedding. What the centre has to be my total fixed costs for three hundred and seventy four dollars what it turned out my profit was one thousand one hundred and twenty eight dollars per wedding but like I said, every three weddings I booked I raised the price is three hundred dollars, but my fixed costs didn't didn't didn't change. So what did happen to my profitability? I raise my prices three hundred dollars and I went two fourteen twenty eight after three more weddings, I raise my prices an extra three hundred dollars for my fixed costs the same my profitability went to seventeen twenty eight in a matter of less than four months. My profitability was over three thousand dollars per wedding because I knew what my fixed costs were and I was moving with the slow increasing model do I think that this is possible for anybody? Absolutely do I think that the growth for me happened a little bit fast? I do, but either way, if you're moving in the direction of your dreams, this is exactly where you want to be. Instead of feeling like you're stagnant, what I want to mainly focus on is changing your pitfalls two peaks I put my fixed costs out because I want you guys to understand my service based pricing model. There are so many wonderful photographers who do product based models and if that's you feel your strength is I want you to focus on them and follow them do research on that I can necessarily speak to that as a strength I want to caution you not to feel bad about what your prices are, because if you look to another photographer and he spent photographers charging four thousand dollars and you're only charging two thousand dollars, you don't know if that product if that photographer is spinning thirty hours editing that wedding, you don't know that photographer is including fourteen twelve by twelve album with thirty pages and a parent album and a bridal session and an engagement session. You can't compare your sticker prices I want you to compare your profitability, put your blinders on, focus on your business and focus on growing do not compare sticker price, compare your profitability and know that that's a direction I want to go which leads us into a homework assignment. So more work let's get excited. Okay, so I want you to first identify your praising model. I want you to stick with it. Are you a service based photographer? Are you a product based photographer? I want you to list your working hours. You need to truly understand how long you're adding your engagement sessions. How long it take you to drive? Engages sessions I estimated dry each of you drive interrogation sessions at thirty minutes. For me, my estimate is two hours because I live in southern california that changing my hours quite a bit, I have to know this working into it I wanted to list your fixed cost before you can cover your expenses before you can feel confident in moving your prices up, you need to know what your fixed costs are and here's a doozie you may or may not agree with this, but I want you to just your prices for supply and demand it's going to take a while for you to find your sweet spot but once you find a pattern once you book like five weddings at this number and you're like this is it once you book that number, raise it up a couple hundred bucks and raise it up a couple hundred bucks because you're worth it if you continue to invest in yourself continue watch creative life you continue to meet other photographers you're investing our indian your business therefore you could justify small, incremental change is on the same page good, I also want you to ask for ways that you can improve if you feel like you're pricing models off one of the best things I did my first year business I met with three other photographers and we all brought our pricing and we all sit around and we compared our pricing models I learned a lot a lot a lot and I feel like you guys have a network here bring get together, show your pricing and then you can justify and defend your prices and learned from other people too