When you’re selling a product or a service - one of the most challenging questions to answer is - “How much do I charge?”. The answer is inevitably - "It Depends"
As you can imagine, there is no hard fast rule - as it depends on a variety of factors. Regardless of ‘what’ you’re selling, the ‘what’ you can charge is based on:
We’ll often be asked: “OK - but what should I charge?” Again, this varies from photographer to photographer - so it’s almost impossible to answer.
This is arguably the simplest form of pricing. You take the base cost of the product (let’s say it costs $1 to produce the item), and then add some markup (let’s say you sell it for $5). You then earn $4 per sale. You set the price based on what you need to earn to make it worth your while to pursue the business. In the example above, $4 profit per sale is what you deem to be the cutoff.
As with the other pricing methods, you can shift this up/down if you find you’re selling too little, or you seem to be selling ‘too much’ - and can likely sell at a higher price (to earn more profit).
As the name implies, as the demand goes up, the price goes up. For instance, if you’re selling water in the middle of the desert - your price could be substantially higher than if you’re selling water next to a freshwater spring. As you set-up your water-selling business in the desert, others will take note - and competition may arise. As demand for your specific water dries up (pun intended), you’ll likely need to reduce your price to compete with the other suppliers. However, in the beginning phase (when you’re the only game in town), you can likely charge a premium.
This methodology can apply to any service - including photography. If demand is high for wedding photographers during the summer, you can likely raise your prices as demand will outstrip supply. The exact % you should increase your prices will vary - but you’ll need to do the research on how much competition you have, what the marker rate is, and what you can charge (while still attracting clients).
Basically - what are your competitors charging? If they’re charging $100, you can charge $95, etc. For a new business, this is often the best way to ‘gauge’ what the appropriate local price point is for your products or services. As we mentioned at the beginning of the article - other factors can make this pricing methodology less useful - in particular if you’re known for your talent, and are in high demand (relative to average photographers).
I hope this article was helpful. There are tons of resources online for these different pricing approaches. I found this Youtube video pretty good:
And these articles do a nice job of breaking out the details associated with each methodology:
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