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Apr 23, 2013

Why I Don’t Charge An Hourly Rate

You will never get rich charging an hourly rate.

Clients will often ask you to provide an hourly quote for photography or a day rate. Personally I do not have much of an issue with a day rate because you can leverage it depending on factors such as usage and complexity. I don’t charge an hourly rate rather I charge a “per job fee”. Admittedly, in my mind, I will often base this on what I feel I am worth an hour. However I do not tell my client what that hourly might be.

Here are the reasons I give to clients on why I do not charge an hourly rate. (Feel free to use these).

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“The reason I don’t charge an hourly rate is because I am able to get a good head shot within 5 minutes. This is due to my experience and technical know-how. Also, I have to consider fixed-cost factors like my studio rent and equipment. Usage is also a factor. These photos are used in advertising and on the website. This gives them value because of the amount of views they receive. One last thing that goes into my rate is software costs and the post-production editing time and delivery.”

Remember your photography has value actually because of the non-disruptive time you can do it in. This speed allows your client to get back to making money.

One thing to bear in mind is in this internet-sharing-culture clients resent terms such as “usage”. This is why I only used it as just one of the factors determining price.

Let me tell you another reason not to charge an hourly fee: you’ll never be rich doing that!

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I have a simple system to negotiate a job rate which I will explain. But before you negotiate the rate that you must CLEARLY ask the number of photos needed and the outcome desired.

1.) I always ask first: “What is your budget for photography?”

Despite some controversy I believe this is the most powerful question in running a photography business. Use their expertise (or lack of it).

Often a client will straight out tell you what has been set aside and you can choose to accept that or negotiate from that point.

However, sometimes a client will say “I have no idea?”. Generally this means they are either very inexperienced or (more likely) they are a good negotiator trying to force your hand first.

2.) My follow-up question is “In general the average cost of doing a job like this ranges between $x-$y. How does that sound?”

This is actually quite effective. Despite asking them their budget I have made them aware that I know what my photography is worth.

Now to ask a question like #2 and to know your rate you will need to have an understanding of

a) your cost-of-doing-business and b) what your competition is charging.

How do you find out what the competition is charging? Ask them nicely or do some pricing research on a stock website (NOT a micro payment stock site!!!). For example: you can go to Getty Images and price out what it would cost them to license the photos.

The goal is to get the job but we must make a profit so we can stay in business long term! Understand: you will get a lot of price shoppers that will say no. That’s ok. Let them go and ruin your competitors’ businesses!

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A short personal story on pricing photography:

In reality Photography pricing is relative and client-specific. Don’t believe me? Listen to this story: I received a call from a very well-known wedding photographer who had just booked a fashion catalog. He wanted my advice on what to charge?

I told him that it could be anywhere from $1500-$8000 a day depending on the client.

He seemed shocked and then said to me “Oh I was thinking $100,000 for the shoot!”

My response to him: you should obviously NOT be calling me for advice then!

Since that time I have seen another friend of mine regularly charge clients between $8k-$20k a day for jobs.

Keep in mind these are both very established well-known photographers. More importantly this just shows you that the sky is the limit for you as a commercial photographer. Something we can all be excited about!

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Always Ask What You Think You Are Worth!

Photographers are always beating themselves up over what they should charge. There are many methods to come to a value for photography but ultimately it depends on what the client will pay!

What I would advise you is to always ask for what you believe you are worth! What is your time worth? What do you need to earn to prosper in business? The client can disagree with that value and offer what they think you are worth… this is called negotiating.

There will always be some weekend warrior or “friend” of the client who can do it “cheaper”. They may even have a “better camera” than you (I see plenty of amateurs with high-end Canons)!

The key is to not be intimidated by what they counter you with. Stand by your price or if you can still make a profit with a lower price then counter back (remember to take away something for discounting the price).

Here’s why:

When you ask for the right amount you will have enough money to hire a great assistant. You will have enough money to rent great lights. You won’t get irritated on the shoot or when you have to do post-production. You will have the enthusiasm to do the best job you can possibly do!

When you put everything into a job then the quality of results shows!

That will lead to a great result and more work!

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In conclusion: pricing photography is a combination of many things:

1.) What people will pay and what you will accept

2.) Your experience

3.) Your unique style

I’ll leave you with a quote from Maria Brophy: “When a potential client says “I have a very small budget and don’t want to pay much” I ignore it. It doesn’t affect the price quote I give. I pretend I didn’t hear it.”

 

Good luck!

Written By: Jason Wallis

15 Comments


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    Ryan Cooper

    I have always hated the concept of an hourly rate because the whole system punishes you for getting better at your job or investing in better equipment to do your job more efficiently. When charging hourly if I get twice as fast at my job, it just means I now have to work twice as hard to get clients because I need twice as many to make the same amount of money.

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    Mike Levad

    when I was in High School my friends had a lawn mowing business. They did not price jobs on how long it took them to mow your lawn but on how long it would take YOU. So what if they had riding mowers and could mow your lawn in 15 minutes. It would still take you a couple of hours.

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    Lindsey Epps-Tucker

    Definitely a great article, thanks for sharing your insight as pricing is a hurdle we all must handle.

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    Jon Peckham

    This made me really think. The only way to get respect out of people these days is to charge what you’re worth. You are soo right!

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    Greg Gardner

    Great advice that hold true for any business endeavor! Thanks

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    Dylan

    Very helpful thank you so much. Pricing has been such a stressful thing but it really isn’t in full perspective.

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    Philip

    Thanks for the tips – what did your friend end up charging for the fashion catalog shoot? Did he estate too high and lose the job or get the job of a life-time?

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    Bradley

    What about charging per approved photo. Meaning what ever photo(s) the client choses that photo or those photos are the ones they pay for. Will that work or just for a time?

    Thanks!