| In order to set your prices to provide value to the | | | | collection price. |
| client and profit for your business you have to know | | | | Adjust the collection to add value |
| what the collection will cost you to produce. I know | | | | Now we need to add value to your collection. If you |
| most photographers do not enjoy doing the | | | | feel that your final price is much to high, then don't |
| accounting work that comes with pricing so I will | | | | worry. We can lower the cost and provide additional |
| make this as simple as possible for you. I am asking | | | | value for your clients. High priced products are fine as |
| you to answer two questions when choosing the | | | | long as they provide even higher value to the client. |
| price for your collection. | | | | We are going to adjust the price by removing |
| What's your package cost you? | | | | products that are too costly in time or money and |
| To answer this question you will need to know the | | | | adding products that are high in value. |
| cost of the products. This includes anything that you | | | | Let's imagine that you are including the following |
| outsource or purchase to complete the clients order. | | | | framed 3 image panel that is intended to hang in the |
| This is everything from the prints that you order all | | | | clients home. |
| the way through the process to the packaging used | | | | The framed piece cost you $99 and 30 minutes of |
| to deliver the prints. If you leave anything out of this | | | | time to produce. This means that your package price |
| figure, the end result is lost profits. | | | | raises $327 because of this one piece. If this price is |
| In addition to knowing the monetary cost to produce | | | | too high, then you have three choices. |
| the products in your collection you also need to | | | | |
| know your time investment. Your time is more | | | | 1. Remove the product - If we remove the product |
| valuable than your money. You can make more | | | | we will likely need to add an additional product to add |
| money, but you'll never get more time. Unfortunate | | | | value to the collection. This is the least desirable |
| many small business owners do not pay as close | | | | choice because the product was included because |
| attention to their time as they do their money. Your | | | | clients want the product. |
| time investment is a critical factor to making your | | | | 2. Add low cost products - We can offset high cost |
| collection work. Each product you include comes with | | | | products by adding other products that are seen as |
| a time cost. You can estimate this cost but be | | | | extremely valuable even though they have a low |
| warned, most task take longer than expected. | | | | cost. An example of a high value, low cost product is |
| Estimations are okay if you are careful and realistic. A | | | | digital images. The cost is basically nonexistent, while |
| better strategy is to time the actually process you | | | | the value is extremely high. |
| go through for each product. | | | | 3. Change the product - Our final option is to change |
| With an accurate idea of your time and money | | | | the product to lower the cost. By choosing a slightly |
| investment you are ready to tackle the next step. | | | | thinner frame and printing the mat & photographs as |
| How much profit do you need? | | | | one print (instead of three prints and a mat) we are |
| How much is too much? There is a multitude of | | | | able to drop our time investment to 10 minutes and |
| ways to answer this question. You must figure what | | | | reduce the cost to $30. This keeps the perceived |
| your cost should be for the collections you produce. | | | | value high while lowering the price of the product |
| If left up to chance or a wild guess, your clients will | | | | from $327 to $100. With this drop in price, the |
| get less value and you lose profit. | | | | product adds value to the package rather than taking |
| Okay, let's get to it. Here is a formula you can use to | | | | it away from the package. But do I even need |
| figure the price the client should pay for the | | | | packages? |
| collection. | | | | Yes and no. Yes, you need packages. They will |
| - Your Collection Price = (Cost x 3) + Minutes Let's | | | | increase your sales and profit if they are properly |
| walk through this formula. At this point you know | | | | created. However, if you are not putting your |
| how much your collection will cost you in dollars and | | | | packages together in a strategic manner, they will |
| time. We are going to use these two numbers to | | | | cost you profit and keep your clients from being |
| ensure that you are allowing for enough profit to | | | | thrilled with the value they receive. A portrait |
| keep your business in the black. Staying profitable is | | | | package that's just thrown together is often worse |
| one thing that will always serve you well. | | | | that having no packages at all. Follow these steps |
| The formula is actually very simple. We are taking | | | | and you can make your next package profitable. |
| your production cost and multiplying this by 3 then | | | | What's next? |
| adding a dollar per minute you are working. This will | | | | Next you need to take a long hard look at your |
| allow for enough profit to cover your cost, your | | | | products, cost and time investment. A realistic look at |
| paycheck, and your overhead. This number may be | | | | those numbers will be your starting point for |
| much higher or much lower than you originally | | | | successful packages that create happy clients and |
| intended, and it's okay if this number is a bit of a | | | | profitable photographers. |
| shock. It's okay, because it's probably not our final | | | | |