So how do you set your prices?

At the start of my business, we had focused mainly on trying to beat my competitors’ prices, thus we were chasing customers. Here we were conducting a Cost-Based Pricing which resulted in lower profits. Cost-Base pricing is supposed to consider the cost of making a product and the desired profit margin. The price is then marked up or down, to arrive at a purchase price that the customers are asking to pay. In this effort, it ignores customer performance needs and what the customer desires to pay at a performance level.

When we started out as a wedding photographer, the hardest thing was trying to set what to charge our customers. As an organization, the goal was and continues to be a goal of making a profit but also provide a product that our customers would enjoy everlasting. For our first customer, we were able to meet one out of the two goals.

For our first paying customer, we had charged only $300. At this price, we had offered 4 hours of service and all digital prints.  At the time, we had assumed that the customer was getting an excellent price for our work and we were making a profit. It wasn’t until we conduct the entire process from contract phase to completion that we realized how wrong we were on making a profit. We had recorded a total loss of profits.

When leads or potential clients shop for a wedding photographer, many potential clients would look at the portfolios and then the price. Price is the most visible and sensitive subject for both customer and wedding photographers. Many wedding photographers hide their prices and try to highlight their value. The one drawback to this practice is that many customers would disregard service once the price was realized. This would usually fall in the Perceived-Value Pricing when customers realize when they compare the prices and benefits of the company’s product with those of a key competitor’s product.

To create a true price that would generate profits as a wedding photographer, many factors need to be included in creating your cost. Below I have highlighted several points in each phase. I may have not captured all points, but these were used to consider our prices for our customers. 

Starting out

• Time to generate and maintain business
• Advertisement Cost, how much do you plan on advertising? What media?
• Website
• File transfer Database
• Lawyer fees for contract generations
• Software for photo manipulation (i.e. Lightroom, Adobe Photoshop)
• Equipment cost (I.e. Computers, cameras, flashes, lens, SD cards, hard drives)
• Backup Web portals
• Insurance for equipment
• Samples (Wedding Albums, Prints)
• Business Cards/Pamphlets

Pre-client interview

• Time to meet
• Travel expense
• Snacks/Coffee expense
• Pre-wedding preparation
• Equipment check
• Battery purchase
• Cleaning equipment
• Replacement/repair damage equipment

Wedding Rehearsal

• Travel expense
• Equipment rental
• Second Photographer expense

Wedding Day

• Appropriate attire
• Travel Time
• Meal/Snacks

Post Wedding

• Bottle of beer
• Epson Salt 
• Tylenol
• Time of post-processing
• Creation of Wedding Albums
• Delivery of Wedding Albums
• Delivery of Wedding Photos
• Gift

All listed items above need to be considered in generating your prices for the customers. Of course, I may have forgotten something. You would need to determine your overhead cost and direct cost.  The overhead cost could be generated by the “Startup cost” above.  Once the overhead cost is determined, we would apply a percentage toward each wedding. It would be helpful to determine how many weddings you are predicting for the coming year. With creating a complete list and understanding of what things cost, we were able to generate a pricing strategy that fits both Vignetting Photography and our customer needs. The point of determining a price is to make a profit and everlasting customers.